Monday, February 26, 2018

Chinese government takes control of Canadian real estate assets

Real estate assets of Chinese insurance company Anbang are now under the control of the Chinese government which has accused the firm of “illegal business practices.”
These assets include Vancouver company Retirement Concepts, the largest owner of retirement homes in British Columbia, which was acquired by Anbang in a $1 billion deal last year.
The Vancouver Sun reports that Anbang owns several US hotels including the Waldorf Astoria.
When the possibility of Beijing taking control of Anbang was first raised last year, the prime minister Justin Trudeau said the retirement homes in BC will continue to be regulated by the provincial authorities. However, concern was expressed by Conservative MP Mark Strahl.
by Steve Randall
REP

Friday, February 23, 2018

Canadian Inflation - February 23, 2018

Canadian inflation, as measured by the Consumer Price Index (CPI), slowed for a second consecutive month to 1.7 per cent year-over-year, down from 1.9 per cent in December. The Bank of Canada's three measures of trend inflation were either up or flat in January, and are all now close to 2 per cent.   In BCprovincial consumer price inflation was 2.1 per cent in the 12 months to January.

Although total CPI inflation has ticked lower in the past two months, core inflation continues to firm up. The Bank of Canada has a tendency to look past short-term movements in CPI inflation so the most recent downtrend probably will not prompt a shift in thinking at the Bank, at least as long as core inflation moves higher.  That means the Bank is still likely to raise its overnight rate at least one more time this year.

BCREA ECONOMICS NOW

Wednesday, February 21, 2018

B.C. budget takes aim at foreign buyers

British Columbia is raising its foreign buyers tax and expanding it to areas outside of Vancouver, while bringing in a new levy on speculators, as part of a sweeping plan to improve affordability in the province's overheated housing market.
The New Democrat government unveiled a 30-point housing plan in its first full budget on Tuesday that also increases the property transfer tax and school tax on homes over $3 million, and invests $6 billion in building 114,000 affordable homes over the next decade.
``Our intent is to bring stability to housing prices with these changes and have revenues to invest in building affordable housing,'' said Finance Minister Carole James in a speech to the legislature.
``We recognize these are bold actions. But that's what B.C.'s housing crisis demands.''
The previous Liberal government introduced a 15 per cent tax on homes purchased by foreigners in Metro Vancouver in 2016. Sales slowed for several months before rebounding and prices have continued to rise.
The minority NDP government will increase the tax to 20 per cent and will also apply it to homes in the Fraser Valley, central Okanagan, the Nanaimo Regional District and the Victoria area. The changes take effect Wednesday.
The speculation tax will be introduced this fall. The annual property tax will target foreign and domestic homeowners who do not pay income tax in B.C., including those who leave homes vacant. Satellite families, or households with high foreign incomes that pay little local income tax, will also face the levy.
Exemptions will be available for most principal residences, long-term rental properties and certain special cases, so most homeowners in B.C. won't be affected, James said.
``This tax will penalize people who have been parking their capital in our housing market simply to speculate, driving up prices and removing rental stock,'' she said.
In the 2018 tax year, the rate will be $5 per $1,000 of assessed value. Next year, the rate will rise to $20 per $1,000 of assessed value. It will initially apply to Metro Vancouver, the Fraser Valley, the Victoria area, the Nanaimo Regional District, Kelowna and West Kelowna.
A non-refundable income tax credit will also be introduced to offset the new levy, providing relief for people who do not qualify for an exemption but who pay income taxes in B.C.
Cameron Muir, chief economist at the B.C. Real Estate Association, said the tax could hit B.C. residents who have vacation properties or second homes, as the credit may not be enough to offset it.
It's also unfair to penalize people from other provinces who own vacation homes in B.C., Muir added.
``That's a really big tax increase for Canadians who have done nothing wrong but own recreation property in one of Canada's most amenable climates,'' he said.
Asked whether out-of-province owners of recreation properties in B.C. would be subject to the levy, James said the government was still considering possible exemptions.
The government also moved to close loopholes that allow people to skirt tax laws. It's building a database on pre-sale condo assignments and a beneficial ownership registry that it will share with tax authorities.
The plan also addresses supply through what the government says is the largest investment in housing affordability in B.C. history _ more than $6 billion over 10 years to deliver 114,000 homes. That includes more than 14,000 rental units, 1,750 units for Indigenous people and 2,500 homes for the homeless.
It will increase a grant for elderly renters and expand a program that helps low-income families.
The government said it's working with municipalities to develop new tools, such as rental zoning, and creating a new office to partner with non-profits and developers to build affordable homes.
Green Leader Andrew Weaver, whose three-member caucus struck a deal to support the minority NDP government, said the speculation tax and foreign buyers' tax should be applied province-wide.
``We support these first steps, however, our view is that they're not really as bold as we need to actually deal with the crisis before us,'' he said.
The Opposition Liberals said the New Democrats have forgotten about creating revenue and tabled a budget that relies on taxes to pay for its promises.
Finance critic Tracy Redies doubted the government would be able to reach its affordable-housing goals.
``They said 114,000 housing units. They are coming up woefully short on that,'' she said.
Thom Armstrong, executive director of the Co-op Housing Federation of B.C., applauded the government's plan. Taxes on speculators and foreign buyers will help cool the market, he said.
``Anything that moderates demand in the market and has a dampening influence on prices will help the overall situation that our members and clients face,'' he said.
By Laura Kane
REP

Monday, February 19, 2018

BC attorney general reacts to real estate money laundering report

A report in the Globe and Mail over the weekend claims that the real estate industry is being used for money laundering by those connected with drug-related crime in British Columbia.
The report claims that money from drug dealing and other crimes is being used by certain unlicensed private lenders who issue mortgages and short-term loans in cash.
The province’s attorney-general David Eby has reacted to the report and other recent media coverage, calling them “very serious and deeply troubling.”
“The nature of these allegations, that this money-laundering activity is actively influencing our real estate market and is connected to the sale of life-destroying fentanyl, underlines the critical importance of addressing money laundering urgently and not ignoring it. This story confirms our government’s commitment to taking action to crack down on money laundering and criminal activity in B.C.,” he said.
He added that he has extended the scope of the review being carried out by Peter German, who was hired to look into money-laundering rules for the casino industry; to assess any connection between money-laundering and other parts of the province’s economy, including real estate.
“Our government will work to determine the scope of this issue, and what must be done to appropriately address it. We will ensure our investigation into money laundering in B.C. casinos is informed by these disturbing revelations,” concluded Mr Eby.
REP

Friday, February 16, 2018

Canadian Manufacturing Sales - February 16, 2018

Canadian manufacturing sales ended 2017 on a down note, declining 0.3 per cent on a monthly basis after a nearly 4 per cent increase in November. The decline was the result of lower sales in the energy sector as well as declining sales in food manufacturing.  Sales were down in 11 of 21 manufacturing sub-sectors, representing 57 per cent of the manufacturing sector.  On a year-over-year basis, Canadian manufacturing sales were up 3.7 per cent over December 2016. 

In BC, manufacturing sales dipped 0.7 per cent on a monthly basis but were up close to 9 per cent year-over-year. For all of 2017, BC manufacturing sales rose 8.1 per cent with significant contributions from a diverse array of industries, most notably the the forestry sector where sales of paper and wood products were up more than 9 per cent on an annual basis. Those gains helped drive employment and housing demand around the province as BC posted another stellar year of economic growth.

BCREA ECONOMICS NOW

Wednesday, February 14, 2018

No new condos in Vancouver for $500K or less

A national survey of what $500,000 buys in newly built condos was unable to find a single example in Vancouver proper – the only city in the survey to have zero stock of new units under $500K.
The latest condo market survey from real estate data company Altus Group said that buyers would have to go to a nearby city such as Burnaby to find any new condos priced at less than half a million, and even those would only be around 450 square feet.
The report also looked at new-build condo sales over 2017 in major urban markets, and found that Vancouver was an “outlier” with a significant decline in sales of new units – “impacted by the sharp drop in new condominium supply coming onto the market,” according to Altus Group.
It added, “Vancouver is the tightest new condominium apartment market in the country and sales levels are not reflective of underlying demand, which remains very strong.”
 Vancouver Courier

Friday, February 9, 2018

Canadian Employment - February 9, 2018

A slow start to the year as Canadian employment fell by 88,000 jobs in January. On the bright side, the losses were entirely due to declining part-time work while full-time jobs actually grew by 49,000 and total hours worked were up 2.8 per cent. The national unemployment rate ticked up 0.1 points to 5.9 per cent.
In BC, employment was down by 5,100 jobs although full-time employment was up by 4,100 while part-time work declined.   Despite those losses, the level of employment was still 2.5 per cent higher than January last year. The provincial unemployment edged up by 0.2 points in January to 4.8 per cent.

BCREA ECONOMICS NOW

Wednesday, February 7, 2018

Vancouver not keeping up with affordable housing demand, says CMHC

VANCOUVER (NEWS 1130) – Vancouver and Toronto are not moving fast enough to supply affordable housing. That’s the key finding in a new report from a federal agency responsible for ensuring housing is accessible.
The Canada Mortgage and Housing Corporation also found low mortgage rates, paired with strong population and economic growth, are driving up house prices.
Research dating back to 2010 — the year Vancouver hosted the Olympics- – shows the cost of an average home in Vancouver jumped 48 per cent over six years. The average cost rose 40 per cent in Toronto.
About 75 per cent of the growth here is thanks to low mortgage rates, buyers having more disposal income, and more people choosing to live in the Lower Mainland.

The CMHC’s Aled ab Iorweth says it’s not clear why Vancouver and Toronto are not meeting demands as fast as other urban areas.
“Supply responses have been stronger in Montreal, Calgary, and Edmonton. There are significant data gaps in this area.”
He admits examining the extent of foreign investment is a challenge because non-Canadians own less than five per cent of Vancouver homes, but 52 per cent of buyers believe prices are influenced by foreign investors.
The 225-page report found prices for single-detached homes are consistently higher than prices for condos. But investment demand for apartments is rising, and that’s driving up prices for rental homes.
news 1130

Canadian Building Permits - February 7, 2018


The total value of Canadian building permits increased 5 per cent on a monthly basis in December.  The increase was primarily the result of higher construction intentions in the residential sector. For all of 2017, the value of building permits across Canada rose 10.4 per cent.  

The total value of permits issued in BC broke a string of consecutive down months, rising 27 per cent on a monthly basis and 55.5 per cent year-over-year to 1.5 billion.  Residential permits accounted for all of the increase, rising 51 per cent on a monthly basis and 60 per cent over December last year. Non-residential permits declined 17.5 per cent on a monthly basis but were 42 per cent higher year-over-year. Building permits were up 22.9 per cent for all of 2017, the largest increase of all the provinces.

Construction intentions in December were higher in only three of BC's four census metropolitan areas (CMA):
  • Permits in the Abbotsford-Mission CMA  rose 167.1 per cent on a monthly basis to just under $80 million. Year-over-year, permit values were more than triple the value from December 2016.
  • In the Victoria CMA, total construction intentions increased 69.2 per cent to $81.5 million and were up 13.7 per cent year-over-year.
  • In the Kelowna CMA, permits were down 31.6 per cent monthly basis to $52 million, a 16.1 per cent decline from  December 2016.
  • The Vancouver CMA recorded permit activity valued at $976.3 million, an increase of 39 per cent over November and up 71 per cent over the last year.  For the year as a whole, Vancouver permits rose 14.2 per cent to $9.4 billion with all components except single detached dwellings posting increasing permit values.
BCREA ECONOMICS NOW

Sunday, February 4, 2018

Vancouver home prices rise as sales fall . January 2018

The Metro Vancouver housing market remained stable in January with the average home price rising 0.6%, compared with December, to  $1,056,500. This came as sales fell 9.8%, compared with December, to 1,818.
Apartments, or condominiums, were responsible for the entire price increase given that those homes rose in value by 1.5%, compared with December, to $665,400.
In contrast, detached homes fell in price by 0.3%, compared with December, to $1,601,500 while attached home prices were largely unchanged at $803,700.
“Demand remains elevated and listings scarce in the attached and apartment markets across Metro Vancouver,” said Jill Oudil, Real Estate Board of Greater Vancouver president.
“Buyers in the detached market are facing less competition and have much more selection to choose. For detached home sellers to be successful, it’s important to set prices that reflect today’s market trends.”
Last month’s sales were 7.1% more than the 10-year average for home sales in January. By property type, detached-home sales were down 24.8% compared with the 10-year average for January home sales, while attached-home sales increased 14.3% and apartment sales were up 31.6% compared with that same 10-year average for January home sales.
The total number of properties listed for sale on the multiple listing service (MLS) system in Metro Vancouver is 6,947 – a 4% decrease compared to January 2017, when there were 7,238 homes listed for sale, and and a 0.2% decrease compared to December 2017, when 6,958 homes were listed for sale.
The sales-to-active-listings ratio for all Metro Vancouver homes in January was 26.2%.
Real estate insiders tend to describe the market as a “buyers’ market” when the sales-to-active-listings ratio is less than 13%, and a “sellers’ market” when that ratio is above about 20% for several months in a row.
Using that guide, the Metro Vancouver residential real estate market is still considered a sellers’ market.
By Glen Korstrom BIV

Thursday, February 1, 2018

2017 Was The Year Of The Condo In Canadian Real Estate: Royal LePage Report

The median price of a condo grew faster than any other housing type.


Canada's residential real estate market saw strong, but slowing year-over-year price growth in the fourth quarter of 2017, according to a report by Royal LePage.
The real estate company says based on data in 53 markets, the price of a home in Canada increased 10.8 per cent year-over-year  in the quarter.
Broken down by housing type, Royal LePage says the median price of a two-storey home rose 11.1 per cent year-over-year , and the median price of a bungalow climbed 7.1 per cent .
But the company says in its report released Wednesday that the median price of a condo grew faster than any other housing type studied, rising 14.3 per cent  on a year-over-year basis due to gains in many of the largest markets.
In Greater Vancouver, condominiums followed a similar pattern during the quarter, rising 20.2 per cent to $651,885, while the median price of a condo unit in the City of Vancouver rose 18.7 per cent to $775,806.

Condos 'the last bastion of affordability'


The company says condos were the only segment to appreciate on a quarter-over-quarter basis among all housing types, rising 1.1 per cent in the final three months of the year.
At the same time, the price of two-storey homes and bungalows fell 0.3 and 0.2 per cent quarter-over-quarter, respectively.
"To prospective homeowners in our largest cities, condominiums represent the last bastion of affordability," said Royal LePage president and CEO Phil Soper.
"This is especially true for first-time buyers whose purchasing power has been reduced by tightening mortgage regulations."
Canadian Press/Huffingtonpost