Monday, November 16, 2015

Soft landing for the housing market, interest rate rises some way off

The Bank of Canada’s deputy governor Carolyn Wilkins believes the housing market and Canadians’ debt levels are still manageable.
In an interview with the Globe and Mail she said that, in line with the bank’s policy reiterated last month, “the housing market and household debt are going to evolve in a constructive way.”
Wilkins pointed to the improving Canadian economy, which she says continues to support the hot housing markets of Toronto and Vancouver, and will see household debt levels, including mortgages, begin to moderate.
The deputy governor said that it is likely to be mid-2017 before Canada’s output would reach full capacity; this should mean that interest rate rises are unlikely during 2016.

House-condo gap: will it become an impassable divide?
The Canadian Press

A dramatic shift is underway in Metro Vancouver's housing market as costly detached homes become a ``luxury product'' out of reach for many families, a new forecast reveals.
Central 1 Credit Union predicts that a widening price gap between apartment or condominium units and houses will be ``difficult if not impossible to bridge.''
``In previous years the housing ladder meant starting in a condo and transitioning to a detached home. That will no longer be the trend,'' said senior economist Bryan Yu in a release.
``For most families the housing ladder will lead from one multi-family unit to another.''
Across British Columbia, home prices and sales will continue to rise for the next two years, the report predicts. Average prices in the province will leap six per cent this year to $425,000, reaching $462,000 by 2017.
Median prices for detached Vancouver-area properties are set to shatter the $1-million mark, fuelled by a lack of land and relentless demand.
Yu said the dearth of supply of detached homes is likely to continue, underpinned by a land base that is hemmed in by the ocean, the coastal mountains, the U.S. border and an agricultural land reserve.
He noted that price momentum in Metro Vancouver has also spilled into the neighbouring Fraser Valley, anchored by Chilliwack and Abbotsford.
In contrast, the Alberta recession, a weak mining sector and few available homes will slow _ but not cap _ demand in B.C.'s Interior, northern B.C. and the Kootenays.
Dropping oil prices and energy sector layoffs have led to job cuts for some residents in the Interior and northern B.C. who commute to Alberta's oilsands for employment, Yu said.
``If the market isn't doing very well (in Alberta), you're going to see less of that spillover demand for vacation properties or secondary homes in these regions,'' he added in an interview.
But parts of the Okanagan Valley, including Kelowna, are seeing rebounding house prices after years of stagnation caused by an over-built market.
``It's taken a long time for them to get rid of the excess supply,'' he said. ``Now that we're seeing inventories fall off in these areas, we basically have much more balanced conditions.''
The financial institution also predicts low mortgage rates will keep sales sizzling. Yu anticipates five-year fixed term rates will remain essentially unchanged through 2016 and will increase marginally to only five per cent by the end of 2017.
Vancouver Island markets, especially Victoria, are also strong as the communities are poised to take advantage of the low Canadian dollar and as over-supply has been sold off, Yu said.
The forecast notes that B.C.'s economic growth is expected to remain among the highest in the country, which will drive gains in employment and personal income. But a mild slowdown in population growth is also expected, caused by weak trends in international immigration.
B.C.'s active housing market _ in particular construction, renovation and acquisition-related costs _ is expected to lift broader economic growth over the next two years.

Wednesday, March 25, 2015

PoCo sees minor tax-rate increase

Property owners in PoCo will see a pretty minor increase on their tax bills later this spring.
On Monday, PoCo council gave the first three readings to the budget, which includes a property-tax increase of 1.49 per cent, which works out to $29 for the average single-family home (valued at $526,175), $22 for the average townhouse and $13 for the average apartment.
A 3.4-per-cent increase to the solid waste levy adds an additional $6 to the total tax increase for the year.
Broken down, $25 of the increase is going toward financing the cost of a new recreation centre, while the other $4 is being put away for long-term infrastructure funding.
Mayor Greg Moore suggested without the two projects, the city could have offered residents another year without a property tax increase.
However, he said based on feedback from residents, the public is willing to pay extra for a new recreation centre.  
“We felt we had a pretty good indication from our residents that they were wanting to see the rec centre expanded and therefore to see this part of the tax go up for it,” the mayor said.
Last year, the city passed a budget that included a 0.21-per-cent decrease, the first in recent memory.
Moore said he’s hopeful the city can continue to keep tax increases low in the years to come, noting the municipality is looking at ways to do the budget differently in the future that will yield even more savings.  
The budget includes additional spending of $2.76 million on “one-time enhancements” funded by surplus and reserve, including:
• Planning, design and public consultation for the Community Recreation Complex ($1.5 million)
• Roll-out costs for the new bear-proof waste cart locks ($141,000)
• Chafer beetle control on city lands, including the cemetery ($104,200)
• Purchase of a city-owned May Day float, rather than renting one (55,000)
• Start-up costs for a Biz Directory, a searchable listing of licensed businesses ($20,000)
• Development of a mobile app enabling residents to access a range of city services ($15,000)
• Decorative lighting for City Hall exterior, both year-round and for special events ($75,000)
• Personnel to pursue revenue-generation projects ($33,000)
• Start-up costs for the north-side Christmas light display ($40,000)
• Costs associated with demolition and cleanup at the public health building site ($200,000)
• Purchase of additional waste carts and kitchen pails (104,700)
• Renovations at Fire Hall No. 2 ($70,000)
• Power systems upgrade at the RCMP Public Safety Building ($40,900)
Offsetting the expenses are $675,900 in planned savings, including:
• Modifying the funding sources for the RCMP contract to include prior-year surpluses from vacancies ($400,000)
• Absorbing base inflation increase costs into existing budgets ($164,700)
• Reducing maintenance of sports fields that see low community use ($40,700)
• Reducing the Terry Fox Library’s materials budget ($36,700)
• Reducing the human resources legal budget ($23,800) and development services consulting budget ($10,000)
The final adoption of the budget is expected on April 13.

© 2015 Tri-Cities Now - See more at:

New sinkhole worries in Port Moody

Could a third sinkhole be forming beneath the ground where the Evergreen Line tunnel is being built in Port Moody?
That’s the concern from residents living in the area after a bulletin was sent out Monday regarding more issues with the tunnel boring machine.
According to the bulletin from EGRT Construction, the group tasked with building the line, the machine is currently under Clarke Road at Seaview Drive as part of regular maintenance that involves inspecting and replacing the cutter head tools before the machine advances.
The bulletin said while maintenance was underway — despite the construction of a subsurface grout wall in front of the machine — some ground material entered the machine’s chamber.
“Crews will be drilling bore holes from the road surface of Clarke Road and Seaview Drive to investigate the grout wall constructed earlier this month,” the bulletin stated. “Additional grout may be injected from the surface to ensure that the grout wall is completely sealed in front of the [machine’s cutter head]. This will allow for the safe completion of the ... maintenance.”
Ground material getting into the tunnel-boring machine  chamber during maintenance was blamed for two sinkholes that opened up along the line last year and in January.
Kerry Lecorre, a Port Moody resident who lives near where the first sinkhole appeared on Chateau Place and has organized meetings among neighbours regarding the issue, suggested material getting into the chamber is not a good sign.
“I really thought after all the precautions they took this time, along from learning what didn’t work the last two times, that they would’ve got it right this time,” she said.
“I imagine the people living in those nearby homes aren’t going to be happy to see the drill machines back on site.”
EGRT Construction noted safety is the first priority on the Evergreen Line project and that precautionary measures are undertaken to ensure the public is safe, adding the work will occur within a secure area.
The bulletin also noted traffic on Clarke Road continues with one lane in each direction, however traffic patterns may change if equipment needs to re-position to different locations.
A spokesperson for the ministry said the contractor is still doing investigative work, pointing out the situation doesn’t necessarily mean a sinkhole will appear.
“Based on preliminary investigations, there is no indication that a hole will form on the surface,” the ministry wrote in an e-mail.
The tunnel portion of the Evergreen Line has recently been plagued with problems, and last month it was announced due to slow progress of the boring work the opening of the line will be delayed to the fall of 2016.

© 2015 Tri-Cities Now - See more at:

Friday, January 30, 2015

Canadian and US Economic Growth - January 30, 2015
The Canadian economy contracted 0.2 per cent in November. Falling energy prices resulted in declining output in the oil and gas sector, while manufacturing and mining production was also lower. Given available data, the Canadian economy likely expanded 1.9 per cent in the fourth quarter of 2014, and about 2.4 per cent for the year as a whole. While export growth will be helped this year by a significant fall in the loonie, we expect growth will decelerate slightly in 2015 to about 2.2 per cent as low oil prices drag investment and employment lower.  Uncertainty around the impact of the dramatic decline in oil has most market watchers expecting a further loosening of policy by the Bank of Canada, with a second rate cut coming in March.  Whether that comes to fruition likely depends on where the trend in oil is over the next month. If prices continue to fall, we expect the Bank will opt for more "insurance" by reducing its overnight rate to 0.5 per cent. However, if oil prices firm up and core inflation remains above 2 per cent, the Bank may opt to hold steady.

In the United States, real GDP grew at a healthy 2.6 per cent annual rate in the fourth quarter, following 5 per cent growth in the third quarter.  Growth was led higher by the strongest rate of consumer spending since 2006.  Note that today's report is the preliminary release and will be revised, perhaps substantially in coming months. Given that growth was actually tracking closer to 3.5 per cent for the quarter, we expect fourth quarter GDP will be revised higher with subsequent releases. 

Friday, January 23, 2015

Canadian Retail Sales - January 23, 2015
Canadian retail sales rose 0.4 per cent in November, with 5 of 11 retail sub-sectors reporting gains.   In BC, retail sales were up 1.9 per cent on a monthly basis, and were 7 per cent higher compared to one year ago. Through 11 months of the year, retail sales in BC are up a robust 5.8 per cent,  the fastest annual rate of sales growth since 2007. 

With the release of November retail sales data our tracking estimate puts Canadian real GDP growth for the fourth quarter of 2014 at 2.1 per cent, which would fall short of the Bank of Canada's most recent forecast of 2.5 per cent for the quarter. Growth in the BC economy is currently tracking at 2.4 per cent for 2014.

Thursday, January 22, 2015

Vancouver Real Estate: 5 Mistakes That Could Mess Up Your Closing

Sitting on paperwork- I realize many people find paperwork boring, but when your mortgage broker requests copies of your tax returns or pay stubs or extra documentation on that rental property you own, please make that a priority. If you're going to be away without phone or email, tell your broker in advance and get him or her all the requested paperwork before you go.
Instructions for funding are not sent to the solicitor until all the conditions are satisfied. Some lenders take about 48 hours each time you submit a new document and want all the conditions satisfied five to seven days prior to the completion date.
Charging big-ticket items for your new home- Sometimes first-time buyers get excited about decorating their new house or condo and they'll go on a spending spree picking out new appliances and furniture before they even close. If you're putting all these purchases on a credit card, that could be a problem, because it boosts your credit utilization ratio. Your lender approved you based on the utilization ratio you had previously, so charging up a storm could raise some eyebrows. Best to wait until after closing.
Switching jobs- If you're getting a promotion or a new job within the same company, that's one thing. But switching to a completely new company could make your lender nervous, because they like to see a history of steady employment with one employer. Even if you'll make more money in your new job and you're prepared to show a new employment letter and pay stubs, it's still a bit of an unknown for your lender. Leaving your job to become an entrepreneur could be even more anxiety-inducing for lenders, because you don't have a track record yet.
Applying for new credit lines- Lenders review your credit report as part of the underwriting process, and they may check it again just before closing, so try to maintain the status quo. Applying for new credit lines such as auto loans, credit cards, or personal loans will temporarily lower your score, so try to avoid this until after closing. 
Depleting your savings- Your lender approved you based on the assets you had when you originally applied for the mortgage, and if a lender is giving an exception on debt ratios based on liquid assets, they may want confirmation that you still have those assets.
The bottom line? Try to keep your job and finances consistent with what they were when you originally applied for the mortgage. Last-minute surprises or missing paperwork could turn your closing day from an existing milestone to a stressful one.

WHISTLER Confidence returns to Whistler real estate Sales value and volume highest in the last seven years

Whistler's real estate market in 2014 could be the comeback story of global recession and the long road to recovery in the mountain resort town.
While there may not have been any headline-grabbing deals in the double-digit multi-million dollar range in the past year, Whistler's real estate, always subject to worldwide whims and trends, has been hotter this year than the past seven years, dating back to the financial meltdown and recession.
Total sales in the resort in 2014, according to the Whistler Listing System, reached $535 million. That's up 15 per cent over the previous year and it's the highest it's been in seven years, up from a low of $309 million five years ago. The same is true of the number of units sold — also at a seven-year high.
"For something to happen like what happened in 2008/2009 that really shakes people's confidence," said Pat Kelly, owner of Whistler Real Estate.
"I think it says a lot about Whistler that essentially the activity levels have returned to where they were beforehand, which really shows the confidence buyers have in the Whistler community and what Whistler offers as a recreational resort.
"They could have just drifted off and gone somewhere else and they didn't. They all came back. It really shows me that what we have has good maturity and has lots of support."
The 2014 numbers contrast to the low in 2009 of $309 million and the high of 2007 of close to $770 million.
"That was a very active year," said Kelly, of the year before the global financial meltdown reared its head in the mountains. "That was really the high point of the previous decade."
It's been a slow climb up since then.
The recovery is now seen in most sectors of the market though condo and townhouse sales continue to dominate market activity, making up almost 70 per cent of all sales.
Kelly's stats show average sale prices for condos rose 20 per cent to $390,165, while townhouses saw a three per cent jump on average to $697,073.
The average sales price of detached properties increased by almost 12 per cent to $1.6 million.
"Single family homes still constitute the largest single category in terms of total dollar value transacted," said Kelly.
Buyers, however, are predominately looking for places in the $1 million or less range.
More than 78 per cent of all reported sales in 2014 were reported below this level.
Whistler's top realtor Maggi Thornhill, who has sold the most real estate by far again this year, a position she has dominated for the past decade, said the market is showing great signs of recovery this past year.
Throughout the Christmas period, too, she saw renewed interest in the higher-end market.
"That's the first time in a long time that we're starting to see that happen," she said of the interest in the $4-6 million range and above. "That area of the market was really, really slow."
Thornhill said the impact of the strong U.S. dollar would be felt in Whistler.
"The exchange rate is going to have a huge impact," she said, not just from U.S. buyers but from around the world too — Hong Kong, Singapore.
"It's far-reaching. It's not just the U.S.," she added.
Chief economist with the British Columbia Real Estate Association Cameron Muir said the weak Canadian dollar is one factor.
The U.S. economy as a whole is recovering.
"We've seen very strong job growth south of the border. We're also seeing the U.S. markets fair much better as well," said Muir. "So that adds to the component of Whistler buyers who are coming from the United States."
Added to that is the provincial market, which has grown at about 15 per cent in total unit sales in the last year. Most regions in the province fared better in 2014 than in 2013.
"The rising tide floats all boats, if you will," said Muir.
"B.C. experienced a significant increase in housing demand last year."

BOC rate cut could boost real estate if banks lower mortgage rates

With fears lower energy prices will hurt Canadian real estate values, a cut to the Bank of Canada’s key rate may be what keeps the market on track.
Calgary realtor John Mayberry said the drop may persuade some to buy.“For a while now we’ve been talking about rates going up, and that it’s inevitable for them to go up,” Mayberry told Global News. “I think a lot of people who were on the fence are going to say, ‘Why not take advantage of it?'”
Mortgage broker Croft Axsen has seen it all in his career, but he said the cut is a shock.
Lately, his business has seen a drop in new mortgages amid uncertainty over low oil prices.
Axsen said it could be good for business, and the economy, if the banks follow with lower mortgage rates.
“Are they going to adjust and give a little bit back to the consumer? We’ll have to see what happens with that. Once one lender drops, they tend to compete,” said Axsen.
CIBC economist Nick Exarhos say variable rate mortgages will see the effect first.
Fixed rates could drop by 0.2 per cent, keeping most mortgages below 3 per cent.
“So obviously that should spill over into savings that borrowers will be able to capitalize on going forward this year if they choose to refinance,” says Exarhos.
While that may be good news for buyers, the worry is that could push many Canadians, already swimming in debt, over the edge.
It’s a warning the Bank of Canada had been sounding for years, but now the price of oil seems to be its bigger concern.
“We’ve had low rates for such a long time, you get into the mentality you believe that rates are always going to be low,” said Axsen. “At some point they’re going to go up.”

Wednesday, January 21, 2015

Bank of Canada Interest Rate Decision - January 21, 2015
In a bombshell announcement this morning, the Bank of Canada announced that it is lowering its target overnight rate to 0.75 per cent. The surprise loosening of monetary policy is in response to the recent dramatic decline in oil prices and the consequent negative impact on Canadian growth and inflation. The Bank expects the Canadian economy to grow 2.1 per cent in 2015 and 2.4 per cent in 2016. Given the initial drag on growth from lower oil prices, it does not expect the Canadian output gap (the difference between actual GDP and GDP at full capacity) to close until the end of 2016. 

While we expected the sharp decline in oil prices and the uncertainty regarding when they might stabilize would keep the Bank of Canada from raising interest rates in 2015, the Bank has instead opted for a more aggressive approach.  How long the Bank intends to keep its overnight rate at 0.75 per cent is unclear, but given strong underlying growth pre-oil shock, if oil prices rise as expected in the second half of the year we could see this move reversed by the end of 2015.   For now, the BC housing market should continue to benefit from low and now likely lower mortgage rates

Tuesday, January 20, 2015

Canadian Manufacturing Sales - January 20, 2015
Canadian manufacturing sales declined for the third time in four months in November, falling 1.4 per cent to $51.5 billion. Lower sales reflected weakness in motor vehicle, chemicals and food manufacturing.

In BC, where manufacturing employs over 160,000 people,  manufacturing sales fell 1.2 cent on a monthly basis, but were 2.6 per cent higher year-over-year.  Through the first 11 months of the year, manufacturing sales are 6.5 per cent higher than 2013. 

Thursday, January 15, 2015

Detached bungalows lead price growth in 2014’s last quarter

The benchmark price for all home types rose year-over-year across Vancouver, with detached bungalows leading the way with growth of 7.5%.
The average price for a detached bungalow in Q4 2014 was $1,124,642, up from about $1,046,200 in the same period last year, according to the Royal LePage House Price Survey and Market Survey Forecast released January 14.The average price of two storey homes was also up, with a 7.1% rise to $1,233,182. Condos saw a price increase of 3.8% to $511,150.
Bill Binnie, broker and owner of Royal LePage North Shore and Royal LePage City Centre, said the price increases for two-story homes and bungalows were related to continuing supply shortages.
Condo prices, however, have remained relatively steady over the past five years.
“The condominium category showed more measured year-over-year growth as this segment is able to continually supply more units to keep up with changing demands and market dynamics,” Binnie said.
The average price increase in 2015 should be less pronounced but will continue to grow, the report said. Royal LePage forecasts an across-the-board increase of 2.8% for the year.“We expect single family homes to continue demanding premium prices while condominiums will see minor gains,” said Royal LePage Westside broker and owner Chris Simmons.
Across the country, home prices increased between 4.5%-6.7% year-over-year to Q4. Detached bungalows had an average price increase of 6.7% to $406,218. Two-story homes increased $6.0% to $443,379 and the price of condos rose 4.5% to $257,624.
A nationwide increase of 2.9% is forecast for the year.

Tuesday, January 13, 2015

Consumer Demand in 2014 Strongest in Five Years
Vancouver, BC – January 13, 2015. The British Columbia Real Estate Association (BCREA) reports that a total of 84,049 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in 2014, up 15.2 per cent from 2013. After lagging for several years, BC home sales eclipsed the ten-year average of 82,000 units and the 15-year average of 83,600 units. Total sales dollar volume was $47.8 billion, an increase of 21.9 per cent from 2013. The average MLS® residential price in the province rose to $568,405, up 5.8 per cent from the previous year.

“BC experienced a significant increase in housing demand last year,” said Cameron Muir, BCREA Chief Economist. “Not since the post-recession rebound of 2009 has the market posted such a turn around."
Prior to 2009, one would need to look back to the 2001-2002 period to find a stronger year-over-year percentage gain in BC home sales.
Home buyers were out in force in nearly every region of the province, with unit sales climbing 8 to 25 per cent in all BC real estate boards, except Kamloops where the number of transactions dipped nearly 5 per cent. “Stronger consumer demand not only pulled down the inventory of homes for sale, but also firmed market conditions throughout the province,” added Muir.
In December, BC residential sales dollar volume was up 18.2 per cent to $2.97 billion, compared to the same month last year. Residential unit sales were up 14.7 per cent to 4,426 units, while the average MLS® residential price was up 3 per cent at $585,718.

Monday, January 5, 2015

Home sale and listing activity reach historical norms in 2014

It was a typical year for the Metro Vancouver housing market in certain respects. The region’s home sale and listing totals for 2014 both rank fifth when compared against the past 10 years of activity, while home prices increased.

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2014 reached 33,116, a 16.1 per cent increase from the 28,524 sales recorded in 2013, and a 32.3 per cent increase over the 25,032 residential sales in 2012.

The number of residential properties listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver increased 2.4 per cent in 2014 to 56,066 compared to the 54,742 properties listed in 2013. Looking back further, last year’s total represents a four per cent decline compared to the 58,379 residential properties listed for sale in 2012.

“While home buyer and seller activity created balanced market conditions within the region, we also experienced some upward pressure on home prices over the course of the year,” Ray Harris, REBGV president said.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver ends the year at $638,500. This represents a 5.8 per cent increase compared to December 2013.

“Detached homes continue to be the most sought after property type in our market,” Harris, said. “Detached homes in Metro Vancouver have increased 8.1 per cent in value over the last 12 months while townhome and condominium properties have increased 4.5 and 3.5 per cent over the same period.”

December summary

Residential property sales in Greater Vancouver totalled 2,116 in December 2014, an increase of 8.3 per cent from the 1,953 sales recorded in December 2013 and a 15.9 per cent decline compared to November 2014 when 2,516 home sales occurred.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,888 in December 2014. This represents a 1.7 per cent increase compared to the 1,856 units listed in December 2013 and a 37.4 per cent decline compared to November 2014 when 3,016 properties were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 10,320, a 10.7 per cent decline compared to December 2013 and a 17.8 per cent decrease compared to November 2014.

Sales of detached properties in December 2014 reached 833, an increase of 9.3 per cent from the 762 detached sales recorded in December 2013. The benchmark price for detached properties increased 8.1 per cent from December 2013 to $1,002,200.

Sales of apartment properties reached 912 in December 2014, an increase of 7.3 per cent compared to the 850 sales in December 2013.The benchmark price of an apartment property increased 3.5 per cent from December 2013 to $380,700.

Attached property sales in December 2014 totalled 371, an increase of 8.8 per cent compared to the 341 sales in December 2013. The benchmark price of an attached unit increased 4.5 per cent between December 2013 and 2014 to $476,800.