Vancouver Residence - Market Insights

Greater Vancouver Real Estate: Buyer and Seller Preferences Revealed

2010-04-15T10:36:00.000-07:00

The real estate market throughout the Greater Vancouver region has undergone some pretty interesting changes over the past couple of years. From the economic downturn until now we've seen dramatic drops and drastic rebounds that have been affected by a variety of conditions including legislative changes, technological innovation, environmental influences, and changes in the financial sector.
In an effort to understand market trends and the behavior of buyers and sellers, the Real Estate Board of Greater Vancouver (REBGV), which represents nearly 10,000 realtors, conducts an annual research review. This information is used to follow trends and predict customer expectations.

The most recent research of this kind was conducted in 2009 along with the BC Real Estate Association and the Fraser Valley Real Estate Board. This research tried to develop understanding of what consumers want from their realtors as well as differences between realtor and client points of view. Most surprisingly, this research has found that changing technology and easy access to information is changing the way consumers view realtors.

In today's technologically advanced society, traditional norms are sometimes inappropriate. Contemporary homebuyers research the markets themselves using the internet. They are more knowledgeable about the market and they've already sourced property information. In the past, realtors were the primary source for real estate information but this isn't true anymore. Consumers still expect realtors to conduct property searches but the more savvy clients want to work with a realtor who can facilitate the purchase; realtor knowledge about the process, negotiating, and making offers are more crucial to today's homebuyers.

This research showed a contrast between realtor's thinking and client thinking. Most realtors still believe that their main role is to provide customers information about properties. Clearly, the research from customers says otherwise so here is a great example of how this research can make a difference. Realtors need to change the way they approach their job in order to create a cooperative and effective realtor-client relationship.

The study also suggests that realtors may not understand the importance of their role with regards to establishing fair prices for homes according to sellers. Indeed, sellers are more confident in a realtor's knowledge about fair prices than they are in themselves.

In 2008, the REBGV and the Fraser Valley Real Estate Board also released a survey of 1,100 residential homebuyers in the Lower Mainland. In this survey, realtors learn that the majority of homes sold in 2008 were pre-sales, those bought before construction was complete. In fact, 53% of sales in Greater Vancouver and 65% of sales in the Fraser Valley were pre-sales. Moreover, the majority of buyers were paid what they had expected to pay for a home. Around 31% of buyers in Greater Vancouver and 23 per cent in the Fraser Valley felt they had paid more than they expected.

With regards to satisfaction, the results were also good. Most home sellers were happy with the final price reached: 77 per cent of home sellers in the Fraser Valley and 69 per cent in Greater Vancouver were satisfied with the final sale price.
Another aspect this research investigates is whether professional and regulatory guidelines in real estate projects satisfied buying and selling customers. In an annual survey, the public is polled about five statements. Most people have a positive opinion of the real estate profession with as many as 75 per cent of consumers viewing realtors as knowledgeable. Around 70 per cent of respondents feel that realtors are held to a high standard of professionalism giving them a positive public image and the same number see realtors as skilled professionals. With regards to the legislative guidelines set up to protect and support consumers, 58 per cent of survey respondents felt well represented.

This research is vital for following buying trends and how they change over time. 2003, for example, was the first year that condominium sales in Greater Vancouver were higher than sales for single-family detached homes. In today's real estate market almost 60 per cent of sales are condominium or townhouse properties. Through this research, realtors learn to re-position themselves not only according to market trends but also the needs and wants of buyers and sellers.

Metro Vancouver Real Estate Rebound

2010-04-12T11:19:00.000-07:00

During the first quarter of 2010 the average home price in Metro Vancouver saw the largest jump of any market in Canada leading some experts to say the rebound is an unrealistic and even irrational response to current market conditions.

On the east side of Vancouver the price for a detached bungalow reached $674,180 during the first few months of 2010. This represents a 25 per cent hike from the same period of 2009. A condominium on the east side jumped around 29 per cent to $402,000. On the west side, the gains have been similar. The average price for a bungalow on the west side dropped to about $950,000 at the beginning of 2009 but had seen a 21 per cent increase on this to $1.15 million in the first quarter of 2010.

Many experts see these jumps as highly irrational: an overreaction based on fear of a poorer market. As the market has started to turn around, buyers have been somewhat quick to act. At the moment, sales figures do not appear to represent the reality of real estate in Canada. Averages prices are up across the board while some markets have obviously seen greater improvement.

Even national averages have risen around 11 per cent in the past year and the average price of a detached bungalow in Canada is nearly $330,000 and averages are up for all property types as well. Part of this market stimulation is based on concerns about raising mortgage rates and stricter lending practices. Over the next couple of years the real estate market will likely level off while other economic factors, like jobs, catch up.

In the Lower Mainland, there has been a recent bump in the number of new listings and this should hopefully limit bidding wars that are driving prices up. In fact, March saw a 60 per cent jump in new listings compared to a year ago. Yet, average prices have risen steadily as well. It will be interesting to see how the market reacts in the second quarter of 2010 but most experts are predicting a cooling period.

First-Time Canadian Home Buyers Ready Regardless of Market Conditions

2010-04-08T13:17:00.000-07:00

The increase of first-time buyers in the recent real estate market has generally been attributed to lower prices and mortgage rates but some experts question how savvy these first-time buyers may be. Obviously, mortgage rates have hit 30 year lows and affordability appears to have returned to many markets across Canada but many first-time buyers may not be fully aware of the market conditions when they set out to buy.

Indeed, many first-time home buyers admit that they have little information about mortgage rules or market conditions. Moreover, many first-time home buyers share a similar quality: they're determined to buy regardless of mortgage rates or prices. These first-timers have been taught that it's never a bad time to buy a home and are entering the market as their personal economic conditions allow it rather than vice versa.

In addition, the vast majority of first-time home buyers, some 74 per cent of Canadians making their first purchase, are amortizing over 25 years or less rather than the current maximum of 35 years. It appears as though these buyers are interested in paying off their mortgages quickly and banks are applauding this trend.

At the moment, there are a number of key incentives for first-time home buyers like the First-Time Home Buyer's Plan, which allows interested buyers to transfer up to $25,000 from their RRSPs to a down payment on a qualifying home. While underutilized, this program can make it much easier to get into the real estate market. In addition, there is the First-Time Home Buyers' tax credit which provides up to $750 in credits that can be directed toward the purchase of a home. Married couples have also been able to direct RRSP funds from gifts to their down payments.
At the moment, lenders are beginning to follow more stringent lending practices and these changes began before the government introduced new lending rules on high ratio mortgages. Buyers with less than 20 per cent down face stricter regulations and all mortgage qualifications are now based on a five year fixed-rate mortgage. Apparently, these changes seem directed at maintaining a stable market as some first-time buyers may not be prepared for increased payments as mortgage rates go up.

Still, some first-timers are being drawn to the market because the cost of owning versus renting is fairly comparable. For example, a typical $300,000 mortgage will have a $1,700 monthly payment while rent for a similar property would hover around $1,200 per month. When you consider a yearly increase of 5 per cent in rents whereas mortgage rates are fixed, the difference is even smaller. The logic that it's better to pay your own mortgage than make payments toward somebody else's mortgage is truer than ever.

While many first-time buyers have shown indecisiveness when it comes to purchasing, most experts will say that it's best to get into the market when you have a viable plan in place. This includes savings for a down payment and a long term affordable budget.

Experts Predict Cool Spring...for Real Estate

2010-03-31T12:19:00.000-07:00

The Canadian real estate market surged to recovery after the economic woes that plagued the country in 2008 and the market looks to remain heated through the spring. With low mortgage rates motivating buyers along with more favourable prices, sales have been steadily increasing throughout 2009 and the beginning of 2010.

Nevertheless, most experts are predicting that the market will cool toward the end of spring as mortgage rates are expected to rise. The last decade marked the strongest price appreciation in the past half century and the economy needs time to catch up. Job creation and wage increases need to be more balanced with the real estate market after an unprecedented decade for Canadian real estate.

But as the media continues to publish stories of an impending rise in interest rates, buyers have been swept up in a climate of urgency. As buying has soared, listings of new properties have actually lagged which has resulted in bidding wars. Consequently, average prices are setting new peaks both for new and resale homes. In fact, some experts estimate that national averages for house price are about 10 or 15 per cent above fair market value. And the markets that are most overpriced are those in the west.

During the recession, Vancouver suffered a dramatic drop in sales and prices but this was met with an equally dramatic recovery in 2009. Following these economic woes the average home price fell marginally, from $593,767 in 2008 to $592,441 in 2009. However, in the first quarter of 2010, average prices have jumped to $630,028.

The unique geography and popularity with foreign investors makes Vancouver real estate among the least affordable in Canada. Some experts expect low mortgage rates to continue and as long as the economy in Canada continues to improve it's unlikely that real estate prices will correct. Instead, property prices will plateau and a normal period of adjustment where other economic factors improve will balance the real estate market. Canadians will likely focus on paying off debt as a strong Canadian currency will slow economic recovery.

Greater Vancouver Real Estate Strong through Olympic Month

2010-03-17T12:21:00.000-07:00

Although real estate experts predicted a slow month because of the Olympics, sales figures were much better than expected. Experts anticipated Olympic excitement would distract buyers from the market, but in fact, it remained a buyer's market throughout the Fraser Valley.

Sales figures continued to show month-over-month gains this February with a 23 per cent jump in sales compared to January. This figure, which represents 1,204 sales recorded by the Multiple Listing Service, was also 77 per cent higher than the 2009 figures for the same month. Lower mortgage rates are partly responsible but many real estate professionals credit changing mortgage rules and taxes for this jump in sales.

Buyers are well informed about changes that will make purchasing new homes more expensive. New mortgage rules are set to take hold in April and the harmonized sales tax will be unleashed in July so many buyers want to complete their sales before these changes come in effect.

Moreover, February saw a jump in the number of homes listed to 2,879 homes for sale during February, an increase of 14 per cent over January. More shockingly, this increase is 77 per cent higher than listings in February 2009 which indicates that the real estate market is recovering nicely.

Another statistic that supports market recovery is the drop in inventory of unsold homes throughout the Fraser Valley. In February 2010 there were 12 per cent fewer unsold homes than February 2009. This means 8,485 units went unsold last month. However, the market is inching toward balanced status as the proportion of sales to inventory equaled 14 per cent. While this is still within buyer's territory and price increases have been modest, balanced market territory is not far off.

The benchmark price for residential units in the Fraser Valley has increased less than one per cent from January to February and these moderate price gains have been the story for the last 3 months. Compared to a year ago, however, benchmark house prices have jumped 11.3 percent to $508,136. For townhouses, the benchmark is also up from February 2009 a total of about 10 per cent to #324,708.

Real Estate Goes for Gold during Olympics

2010-03-05T10:31:00.000-08:00

Most real estate experts predicted a slow February as the Olympics were expected to distract interested buyers. Nevertheless, the market continued to show strength throughout the month and the Greater Vancouver Real Estate Board reports 2,473 sales in February.

Not only are these impressive sales figures, but they also represent a 30 per cent jump in sales from January and an even more dramatic hike compared to the 1,480 sales recorded in February 2009.

The future impact of the Olympics on real estate in Vancouver is unclear but it was good to see strong activity in a month many considered would bring the start of a cooling down period in Metro Vancouver real estate.

Some experts are quick to point out that the ratio of sales to listings in Metro Vancouver is on par with a balanced-market and that there was an inventory of 11,346 unsold homes last month. As we're almost into the second quarter of 2010 we're starting to see a rise on the number of homes listed and demand is tapering off. While there is still considerable interest in real estate, the demand for homes is not as high as in the end of 2009.

On the other hand, benchmark prices continue to rise, however moderately. In Metro Vancouver, the average price for a standard home sold reached $800,796 which represents a 1.5 per cent rise from January and an impressive 22.5 per cent increase from February 2009.

For townhouses, the benchmark price reached $495,496 last month while apartments rose to $490,899. That's a 16 per cent and 17 per cent jump respectively from a year ago. Clearly the market is doing well, whether this is balanced territory or not. The future of the market still appears to be more leveled than we saw in the closing of 2009 but real estate professionals continue to be surprised by the quick and impressive turnaround this market has seen in the past 12 months.

Looming HST Drives Sales

2010-02-26T09:09:00.000-08:00

The consensus among home buyers at the moment seems to be "no time like the present." As new mortgage regulations, expectations of higher interest rates, and the coming harmonized sales tax in many provinces appear to be having a considerable impact on sales at the moment. Many experts predict this wave of sales to continue into the summer.

In fact, increased real estate activity has been noted in as many as 16 markets throughout the country, especially in January which is typically one of the slowest months of the year. This unparalleled activity has created marked drops in active listings in 4 of 5 surveyed markets and has created reasonable concern about having too many buyers and not enough homes.

Of course when there are more buyers than available listings there is almost always a push in prices. Currently, Toronto, Kitchener-Waterloo, Ottawa, Victoria, and Metro Vancouver represent the markets with the most restricted inventories. With inventory drops ranging from 27 to 41 per cent there have not only been sizeable improvements in year-over-year sales but also a steady increase in average prices.

The biggest gains in sales have been seen in Metro Vancouver where there was a year-over-year improvement of 152 per cent; then Kelowna at 121 per cent; Greater Toronto at 87 per cent; Victoria at 69 per cent; Hamilton-Burlington at 58 per cent; London-St. Thomas at 55 per cent; and finally Calgary at 47 per cent. As you can see, many markets across Canada are benefiting from drastic improvements in sales compared to a year ago.

Somewhat surprisingly, the improvements recorded in Metro Vancouver actually corresponded to a decrease in sales from the end of 2009. Usually success in a market is measured by the ratio of sales to active listings which dropped in January 2010 throughout Metro Vancouver. This ratio was 26 per cent in January but at the end of 2009 this ratio ranged between 31 and 33 percent. Basically, this ratio represents the percentage of homes sold compared to the inventory available.

A 26 per cent ratio is almost balanced market conditions while figures over 31 per cent represent a seller's market. The last time the Vancouver market was as hot as the end of 2009 was summer 2006. But as sales have dropped slightly in January we're seeing a few more active listings and a pretty healthy market.

Western Canada has certainly been leading the real estate recovery and home prices have raised the most here as well. Victoria saw a 25.5 per cent increase in January compared to January 2009; Kelowna, Greater Vancouver, St John's and Toronto saw 22 per cent, 19.5 per cent, 23 per cent and 19 per cent increases respectively.

New Rules Set to Tighten Mortgage Requirements

2010-02-17T10:26:00.000-08:00

On Tuesday, the federal government introduced new mortgage rules that make it more difficult to qualify which will likely reduce the purchasing power throughout Metro Vancouver by as much as $50,000. In the midst of concerns that many average Canadians are stretching themselves too thin to take advantage of historically low mortgage rates, the federal government has responded by creating tougher requirements for buyers looking for insured high-ratio mortgages.

Come April 19th, the government will require that all buyers meet the criteria to qualify for a five-year, fixed rate mortgage, regardless of whether they are looking for a variable mortgage or not. Typically, variable mortgage rates are much lower and therefore more attractive to buyers with less capital.

Leading economists in British Columbia point out that the previous standards required buyers meet the requirements for a 3 year fixed mortgage rate, which is still typically lower than variable rates. With this change, the average household loses nearly $40,000 of their purchasing power. Clearly, this will have a substantial impact on the real estate mortgage, especially for newcomers to the market.

Still, some experts are not convinced about how much these changes will affect buying power or the market at large. One estimate figures the change will squeeze the purchasing power of buyers by as much as $50,000. But, how much will this affect the market?

The majority of buyers in the market won't be affected and first time buyers will still have access to low rates based on a five per cent down payment and 35-year amortizations. Contrarily, if the government were to increase the minimum down payment and reduce the amortization period, the market would be affected more seriously.

As anybody who has been following the market recently knows, things have been booming throughout the Lower Mainland and Metro Vancouver largely due to the historically low interest rates. Last April, for example, the Bank of Canada slashed its benchmark policy rate to 0.25 per cent and promised to hold it there until at least July. These efforts were in direct response to the struggling economy as the bank attempted to fuel growth rather than to prevent the looming housing bubble that many experts were predicting.

The goal continues to avoiding a housing bubble and the government appears to be taking proactive steps to be cautious. Some other rule changes have also been introduced and will affect individuals hoping to refinance their mortgages. The maximum amount that can be withdrawn has been lowered from 95 per cent to just 90 per cent. Moreover, they have placed a minimum 20 per cent down payment for government supported mortgage insurance on rental properties.

This would have a direct impact on those looking to buy condos or other properties for rental income. Before these changes, the government required only a 5 per cent down payment. And it's these changes that are expected to cause the most ripples in the Metro Vancouver market because of its shrinking market for purpose-built rentals.
Still, this means mission accomplished for the government which clearly seems to be trying to cool the current real estate market and prevent further increases in housing prices. Unfortunately, this could also mean a long-term drop in rental home and condo investments.

Experts have mixed reaction over deferring property taxes

2010-02-10T14:23:00.000-08:00

British Columbia provincial government has recently announced plans to allow families with children under 18 to defer property taxes. Some experts are concerned that this could create future debt problems for individuals who aren't careful with their money.

The idea is that deferring property taxes will allow these families with children to get into the housing market or move up the property ladder. At the moment, there is a program in place where senior citizens and low income residents to defer taxes while they live in their own home. These deferred taxes are subject to interest and must be repaid in full before the home is sold.

While this is a useful program for seniors, who are less likely to sell their homes, but may not be appropriate for young homeowners. Moreover, seniors' homes will appreciate in value more than the taxes being deferred while this isn't necessarily true for new homeowners. As house prices continue to rise, the cost of deferred taxes is easily covered when the home is sold. However, for young homeowners, the situation is different. These taxes must be paid eventually and deferring them may lead to insurmountable debt.

Under this program, the provincial government will pay the deferred taxes to municipalities so that local governments don't suffer from lost property tax revenue. Qualified families can either defer the tax until they die or sell the home, but they must be paid back and after accumulating interest at that.
While the program will not be ideal for everybody, some experts feel that the program will help ease the financial responsibility of raising children. This added flexibility could be a real life-saver for families that would benefit greatly from a few hundred extra dollars every month. Unfortunately, the interest accrued on the deferred taxes will add up so some are concerned about homeowners' ability to pay them back.

The program may be a great help to some but they need to plan their finances very carefully to avoid getting buried under a mountain of debt.

Increasing Prices Likely to Slow BC Real Estate Growth

2010-02-04T10:21:00.000-08:00

Nobody will deny that the British Columbia real estate market has been buoyed in recent months by low mortgage rates. In order to respond to the economic downturn, the Bank of Canada lowered interest rates so drastically that many home buyers couldn't resist the bargains. Unfortunately, some experts are concerned that the low interest-induced rebound may have used up the majority of market growth for the coming year or 18 months.

At the moment, most real estate experts are expecting only moderate growth, around 3 per cent, in 2010. This is a prediction of 90,100 sales in 2010. More surprisingly is that these same experts are predicting a 3 per cent drop in growth, to 87,500 sales, in 2011.

When it comes to average prices, the forecast is for a five per cent increase to $490,900 in 2010 followed by a meager 1 per cent increase to $494,800 in 2011.
The main long-term issue is without question affordability. At the moment, home prices in Vancouver and Victoria are inching back toward record levels and all evidence points to increasing mortgage rates in 2010 as well. This means the cost of owning and maintaining a home may be out of reach for many new buyers.
Because of our recent economic problems, the cost to own a home dropped significantly. Mortgage rates, average prices, and even property taxes were cut dramatically at the end of 2008 and throughout 2009 but these trends will not continue.

For the most part, markets that have come back the strongest in 2009 should see more moderate growth in the coming months. This may give way to some of the slower markets catching up with Vancouver and Victoria. Still, the cost of owning a home is going to start creeping up again and this will likely stall real estate growth in 2010.

Real Estate and Financial Sectors Pave the Way to Recovery

2010-01-25T09:54:00.000-08:00

As housing sales and prices increase, so have staffing numbers throughout Canada. Veteran real estate agents throughout Ottawa have been riding the wave of recovery as the effects of the recession have slowly dissipated. The high number of real estate agents actually tells a lot about the market because without sales there is no money for agents. And no money usually causes less successful agents to get out of the business and look for something else, but this hasn't been the case.

At the end of the 80s housing boom there was a similar downturn at the beginning of the 90s but many experienced real estate agents say that our current economic woes can't be compared to those of 2 decades ago. Despite a quiet start to 2009, house sales and prices have improved steadily and the number of realtors has also increased.

While some cynics are quick to point out that the Ottawa market does not represent most communities in Canada, namely because of stable employment offered by the federal government, few can argue with numbers that suggest recovery pretty much across the board. In fact, most markets in Canada weathered the storm quite well and have reached new highs or are at the very least stable.

The strength of real estate markets has been mirrored by improving employment numbers too. In Canada, real estate employment increased a staggering 35 per cent to 71,000 jobs since October 2008, the peak for the Canadian job market before the recession. Alternatively, employment numbers in other sectors have not fared well. Overall employment in Canada has dropped by 2.3 per cent in the same time span meaning we have lost more than 400,000 jobs as a result of economic concerns.
A quick comparison: in all of 2009, employment in Canada fell 1.4 percent while jobs in real estate rose nearly 14 per cent. This is an incredible difference that can be attributed to a surprisingly strong real estate market. Historically low interest rates, falling prices, and the resulting confidence in the market are all major factors with regards to these employment figures.

As low interest rates continue to be the norm, the benefits are still being reaped in real estate. Moreover, the Canadian public believes that the economic downturn is nearly over and has more confidence to buy but also want to buy before rates start increasing.

But the real estate market alone is not the only contributing factor to increased real estate employment. Indeed, a strong real estate market has driven activity and employment in other industries like finance and insurance as well. Due to government stimulus spending, employment figures have been strengthened in many areas.

The services sector has been holding strong while the goods producing sector has struggled a bit more. Though this is not surprising; we don't normally expect economic recovery to be driven by manufacturing or construction industries. As seen in payroll statistics, the most serious 12-month job losses were seen in the mining and oil and gas industries where employment nose-dived more than 18 per cent. The forestry industry has been hit hard losing 16 per cent of jobs and the manufacturing sector saw a drop of 12 per cent.

While there have also been losses in the construction industry, the outlook is less bleak. Approximately 5 per cent of jobs in construction were lost during the recession, the strength of the real estate industry suggests that construction will rebound quickly. Likewise, the moderate drop in employment in construction suggests that the quick recovery of the real estate industry ameliorated any effect on construction jobs. Moreover, expected stimulus spending on infrastructure has kept the construction industry from suffering too much.

The construction industry had been on a downward trend, but a shift is already apparent. Government planning and money with regards to infrastructure means that the industry will likely remain strong for the next 10 years or more.
Nevertheless, the real bright spot for jobs in Canada has been real estate, insurance, and banking. Employers in these sectors are more confident about an increasing payroll at the beginning of 2010. Other industries where steady hiring is expected include transportation, public utilities, public administration, and retail.

On the whole, the job market in Canada looks to be improving, albeit slowly. A survey of approximately 2000 Canadian employers suggests a slightly improved hiring climate for the beginning of 2010. However, some experts are cautious in their optimism an expect jobs recovery from the recession will be much weaker than the recovery from the previous recession. The end of the 90s recession was supported by the dot com boom and we're not likely to see these kinds of benefits from other industries.

Still, there appears to be a solid demand for skilled workers, especially in information technology, and companies are driven to be more productive. This could support job growth when organizations look for high-tech solutions to their problems.

Experts Predict Continued House Price Increases in 2010

2010-01-20T09:51:00.000-08:00

From the beginning of 2008 to the end of 2009, the housing market in Vancouver has seen remarkable price increases and most evidence suggests this trend will continue into 2010. In fact, market research forecasts a 7.2 per cent increase in housing prices this year.

The strength of the real estate market in 2009 was surprising but welcome. There was much more confidence from both buyers and sellers than anybody would have predicted at the end of 2008. Even during typically slow periods, like before Christmas, there was increased activity prompting some experts to announce an end to real estate woes in the Greater Vancouver Regional District (GVRD).

Take for example, detached bungalows. In Vancouver, these properties sold for an average of nearly $830,000 in the final months of 2009 which constitutes and 11.4 per cent increase from the year before. Likewise, standard condominiums throughout Vancouver reached an average price of $452,750, an 11.8 per cent from the final quarter of 2008 to that of 2009. Even the typical 2 storey home saw a market increase in prices averaging $917,500, a year-over-year increase of nearly 10 per cent.

As mentioned, many experts are predicting continued success in 2010 with the highest increases expected to top 7 per cent. These increases will likely be driven by a couple of factors. First, there is renewed optimism not only in the real estate market but the Canadian economy as well. And secondly, there are a large number of interested buyers from a wide range of backgrounds throughout the Vancouver market. While a slower market is expected during the Olympic Games in February, most believe January and the months following the Olympics will benefit from increased activity. Some are even saying that we should look forward to a surge following the Olympics because of possible increased interest from foreign investors.

On the whole, the Canadian residential real estate market should set a strong pace in the first 6 months of 2010. An improving economy, including better employment figures across the country, along with government stimulus spending and low interest rates will fuel demand. Indeed, the end of 2009 has provided considerable momentum to the 2010 market through reduced mortgage costs and other stimulus factors. A marked increase in demand has also surprised some real estate experts as many were predicting slower activity toward the end of 2009 and beginning of 2010.

At the moment, we are also suffering from a bit of a lack of available properties for sale which has lead to greater demand thereby increasing housing prices. But the second half of 2010 will likely see more stabilization in the market. Prices will continue to rise as demand is high and supply is low, but newer properties on the market and the likely increase in interest rates will eventually balance out the rising home prices.

During the recession, some parts of Canada were hit harder than others. The Toronto, Lower Mainland of BC, and Vancouver real estate markets suffered considerably during the recession but they have also been the markets that have bounced back most robustly. Significant gains have been documented in these regions in a number of areas including the total number of sales and average prices across all housing types.

While the Canadian economy has yet to recover completely, there are obvious reasons for optimism. Many sectors have seen marked drops in employment which has certainly caused ripples throughout many other industries, namely real estate. Nevertheless, the real estate markets have weathered the storm quite well and will likely see continued improvements as the economy gets back on its feet.

BC Real Estate Market Soaring

2010-01-15T09:57:00.000-08:00

The BC real estate market has made a comeback: a big comeback. Riding the wave of increased property sales in the southern and coastal regions of BC, the entire province was lifted to a strong real estate showing at the end of 2009. In total, the province recorded 5,703 homes sold through the MLS in December which constitutes an increase of 132 per cent over December of 2008. Indeed, this is the second busiest real estate December on record.

Over the year, BC real estate agents completed 85,028 sales, up nearly 25 per cent from 2008. Moreover, average home prices over the year climbed to $465,725 in 2009 which is a 2 per cent improvement over the previous year. Surprisingly, the year begun with housing prices and sales figures near a 25-year low and ended with the same figures hitting a 20-year high.

Most experts agree that the drastic cut to mortgage rates is what spurred this surprising growth. Deflated prices and favourable interest rates prompted many first-time buyers to delve into the market in search of killer deals. Buyers were indeed attracted to affordable mortgages and this created momentum in the market that has yet to cease.

The first quarter of 2010 is likely to continue to benefit from higher sales. There still is a high demand from buyers as higher prices are pushing some people out of the market. In addition, many potential buyers probably want to take advantage of low mortgage rates while they last.

Still, gains in real estate markets were not even across the board. Sales in the Lower Mainland and Victoria were much stronger than those in the Okanagan or interior. Take sales in Vancouver as a prime example: they were up nearly 45 per cent compared to 2008. Likewise, Victoria benefitted from a 30 per cent jump in sales. Meanwhile, sales in the BC Northern Real Estate region dropped approximately 10 per cent and sales throughout the rest of Vancouver Island grew only a moderate 7 per cent.

December Vancouver Real Estate Sales the Metaphorical Cherry

2010-01-07T10:32:00.000-08:00

After the Lower Mainland real estate market plummeted desperately at the end of 2008, this December caps an impressive third quarter rebound in 2009. The second half of 2009 was in stark contrast to the shocking lows seen in a real estate market that hadn't suffered so much since the early 1980s. At the moment, sales continue to increase and prices are nearly back to their peak.

Obviously, one of the biggest factors in the resurrection of Vancouver's real estate market has to be low mortgage rates. Lower housing prices tempted new buyers but it was the banks' decision to slash interest rates that really motivated buyers. Improved sales are expected to continue until mid-2010 when mortgage rates should rise.

Most experts also predict that prices will continue to increase which makes some weary that these improvements will continue. Higher prices and mortgage rates will likely have a negative impact on sales but nothing like what was seen at the end of 2008. Still, Greater Vancouver recorded more than 35,000 sales in 2009 which was a drastic 45 per cent improvement over 2008.

In fact, each month of the second half of 2009 saw record or near record sales and this December was the 3rd busiest on record. Yet somewhat surprisingly, real estate prices did not rise consistently across communities. The west side of Vancouver has reached a benchmark average of $1.5 million which is 30 per cent more than a year ago. Meanwhile, the Fraser Valley saw much more moderate improvements. Sales were up 26 percent to nearly 17,000 recorded while the benchmark has risen a mere 7.3 per cent to $430,827.

Nevertheless, most markets have gone from some of the worst sales figures in January to some of the best sales figures in December of the same year. In January, Vancouver recorded only 762 sales while the Fraser Valley 389. Compare that to the regions' best months which saw 4.528 sales and 2,089 sales respectively and you start to get a sense of how drastic the real estate rebound has been. For interest sake, Vancouver sales figures in December were 2,515 and the Fraser Valley were 1,260.

Moreover, various regional differences in the Fraser Valley market have also been noticed. White Rock, Surrey and Langley for example fared much better than Abbotsford or Mission. The closer properties are to Vancouver the more desirable they seem to be making Vancouver and the Lower Mainland the hottest regions on the market.

Inventories of unsold homes also continue to shrink, especially in the Lower Mainland as improved sales are eating away at the current inventory. In fact, there has been a 41 per cent drop in unsold homes from December 2008 to December 2009. In other words, 1 year ago there was a 10 month supply of homes listed while today there is only a 3 month supply.

The Condo Craze makes a Return

2009-12-31T09:29:00.000-08:00

The Vancouver real estate market has been abuzz for the past several weeks as sales and prices continue to creep toward their 2008 peak figures. On Saturday morning, a pack of enthusiastic investors braved inclement weather to queue for hours to get the first crack on pre-sale condos in a tower yet to be built in Yaletown. Apparently, some investors even decided to sleep outside on Friday evening to get a prime location in the line up.

The turnout was surprising, to say the least. 50 or so investors turned up to view models of the building which will eventually house 190 units in the first 26 floors of the tower. Expected to be completed in early 2018, units are likely to fetch anywhere from $320,000 to upwards of $900,000. In the end, developers are hoping to be approved to build 41 floors and are looking to market premier suites to international investors during the Vancouver Olympic games this coming February.

The international economic outlook is such that many experts doubted the success of the project. Global debt and the credit crisis have limited international investment over the past year and developments in other locales have seriously suffered. Take the crisis recently seen in Dubai for the perfect example. Yet, Vancouver looks to be making a very strong comeback.

There are few, if any, cities in the world that can compare with the rebound seen in the Vancouver real estate market. Its good location and rarity of similar projects make the Yaletown tower a highly attractive site. All evidence points to the expectation that Yaletown real estate will appreciate considerably after the Olympics and investors are excited for the opportunity to get a suite at today's prices. And the response from investors has not disappointed. Rushing to place bids on units, potential buyers drove up the prices by around $50,000 overnight. Moreover, prices are expected to jump again during the Olympics in February.

Indeed, the City of Vancouver is relying on the Olympics to help sell units in the $1.2 billion Athletes Village in False Creek. The City has been struggling to move these units due to the economic concerns of the last year and many of the units have been taken off the market until after the Olympics in a hope to leverage the celebration to entice buyers. In order to recovery a substantial investment by taxpayers, the City is looking to sell approximately 730 units.

The Greater Vancouver Real Estate Market is Back!

2009-12-11T10:35:00.000-08:00

For the past several months, all signs have pointed to a dramatic return in the real estate markets around Greater Vancouver. With mere 874 residential properties sold in November of 2008, many experts were shocked to learn that the figure more than tripled to 3,083 sales this November. As we are in the midst of economic recovery and jobs figures are still down, it is almost unbelievable that Greater Vancouver saw its 3rd busiest November on record.

And it's not only sales that are rebounding. Housing prices are starting to creep up as well. While the benchmark for homes in November 2008 was around $495,000, that figure has jumped considerably to $560,000 which is very nearly the peak market prices of May 2008. Furthermore, listings are up around 21 per cent from a year ago which is a figure that is in line with improved sales. While consumer confidence has been a major factor in this rebounding real estate market, low interest rates is also a huge motivator for buyers. New home buyers continue to benefit from some of the most favourable mortgage rates in years. This has likely been the biggest factor in the unpredictable return to market success and has also helped to push prices toward market peaks.

Moreover, these improvements are not been restricted to the Greater Vancouver area as the Fraser Valley has also recorded drastic sales improvements. 1,522 sales were finalized this November making it the second busiest of the decade. Likewise, the benchmark for detached homes has risen approximately 6.5 per cent to an impressive $497,000. Compare these figures with the meagre results in November of 2008, when just 507 sales were recorded, and you can see this is a staggering and unprecedented rise in sales.

Even homeowners looking to take a step up in the property ladder have been attracted by low interest rates. Now is the perfect time to get into a bigger house without worrying about increased mortgage payments. Still, some experts point out that inventories have been shrinking steadily since spring which has likely resulted in the increase in prices. These trends however, have not been evenly spread across the regions. The benchmark in Vancouver west for example rose more than 40 percent from last year while in Maple Ridge the improvement was much more marginal, at only 3.3 per cent. All signs point to greater improvements in urban markets while suburban markets are making a slower recovery.

October Home Sales Reach a 6 Year Peak

2009-11-27T12:37:00.000-08:00

Buoyed by sales activity in Vancouver and the South Coast, home sales in British Columbia reached a 6 year high last month. The highest number of home sales since 2003 was reached largely due to the hottest markets in BC which include Metro Vancouver, the Fraser Valley and Victoria. October's figures show 8,624 sales were cleared which is a 115 per cent increase from October of 2008. A total of 44 per cent of these sales were recorded in Greater Vancouver making it one of Canada's most active real estate markets.

Metro Vancouver saw a staggering 171 per cent rise in sales from October 2008, with 3,767 sales this October. Similarly, the Fraser Valley recorded 1,583 sales which is an even more impressive 120 per cent increase from the same month a year ago. While most of the activity was in Vancouver and the South Coast, Victoria also had a very good month with a 135 per cent jump from last October meaning approximately 1,590 sales were completed in the area.

Most experts remain cautious about these figures as many communities with resource-oriented employment are still dealing with a weaker real estate market. Nevertheless, the larger urban centers around Vancouver make it an ideal place for the economy to begin rebuilding and this has been evidenced by the improvement in real estate activity. Vancouver buyers have been credited with some of the improvement in real estate markets in the interior as recreational-property purchases have kept these markets afloat.

However, many real estate experts are already predicting an end to the market upturns in Greater Vancouver. Many believe that the pace of sales that has been set in the final quarter of 2009 cannot be maintained since the sales in these markets have been mostly driven by a combination of built-up demand and low interest rates. At the moment, real estate markets around Vancouver have been propped up, to a certain extent, by this pent-up demand and because this demand has been satisfied very quickly, the well may run dry, so to speak. As the market improves, prices rise making properties less attractive to buyers.

Lower Mainland Continues Strong Real Estate Showing

2009-11-12T09:50:00.000-08:00

Despite some signs that real estate may be levelling and some experts predicting a reverse in the recent strength of the market in Canada, the Lower Mainland saw 172% more sales this October compared to the same month last year. In addition, housing prices continue to rise as well. While a mere 1,704 sales were recorded in October 2008, the figures this year soared to 3,704 according to the Multiple Listing Service and benchmark figures are up as well. More surprisingly, sales figures this year also eclipse those of October 2007 by an impressive 22%.

The benchmark, defined as the average price for the typical home sold, increased further to $749,808 last month which represents an 8% improvement on that figure from the same month last year. While still below the peak benchmark, real estate experts are happy to see these figures continuing upward. The benchmark for detached homes also improved approximately 0.4% to $491,128, a somewhat more modest gain.

In all likelihood, sales activity continues to be buoyed by favourable mortgage rates. Nevertheless, foreign investment appears to be on the rise as well. Between the greater confidence of local buyers and this return of foreign interest in our real estate markets all signs point to further recovery throughout the Lower Mainland.

Meanwhile, inventories are shrinking. In fact, the total number of active listings in October fell 4% from September and a whopping 37% compared to last October. In the simplest business terms: increased demand and decreased supply while drive prices up. Although October saw a 7% increase in new listings from September, there are approximately 3000 fewer units on the market.

November and December will almost certainly see some leveling of these figures as they are typically slow months on the real estate calendar. In addition, experts are warning that mortgage rates are likely to creep up again. As the economy improves banks will start raising rates and this will undoubtedly impact the real estate market. So as the evidence points to continued strengthening of the real estate market throughout the Lower Mainland, future, uncontrollable factors will definitely have an effect.

Vancouver Fall Housing Market Propped Up by High Demand

2009-10-26T10:26:00.000-07:00

To the surprise of most experts, the British Columbia real estate market has been performing exceptionally well through the end of summer and into early fall. Sales figures, demand for housing, and average prices have rebounded from the recession much more quickly than expected but analysts are predicting another slow down before the end of the year.

With the local economy somewhat slow to recover, there has been a disparity between real estate and other markets. The B.C. Real Estate Association recently released a report showing a 68% increase in September sales when compared to a year ago. These 8,576 sales constitute the busiest September since 2005 which makes September 2009 the third busiest recorded. In fact, comparing sales from the first three quarters of 2009 to those of 2008 reveal a 6.3 per cent improvement this year with 63,521 MLS sales. While some argue that we have enough momentum to carry the market for several months most agree that sales in early 2010 will reflect current economic conditions more accurately. With wage growth, job growth, and other economic fundamentals lagging it is unlikely that the real estate market can continue on its steep upward trend.

For the most part, the rush in B.C. home sales seen over the first 9 months of this year have been the result of high activity in coastal markets. Metro Vancouver is the province's biggest and busiest market and when the market crashed last winter many potential buyers decided to take a wait-and-see approach. With current low mortgage rates and stabilized pricing, many of these buyers felt now was the best time to get back into the market. Indeed, some monthly mortgage payments would have fallen by more than a quarter making buying a new home considerably more affordable. Unfortunately, with these low rates, buyer demand has increased and driven the market out of danger meaning that housing prices have begun to increase again. As prices come up they have the opposite effect on affordability and the mortgage rate savings benefitting buyers is being eroded by these higher prices.

First-time Vancouver home buyers attracted to low mortgage rates

2009-10-13T11:21:00.000-07:00

The real estate market across Canada is starting to heat up again mostly as a result of low mortgage rates which are attracting first-time buyers. As these low rates are too good to pass on for many first-time home buyers we see prices increasing and sales strengthening in the Lower Mainland's strongest real estate markets.
Take Vancouver as an example where home sales continued to rise in September as evidenced by the Multiple Listing Service figures of 3,559 sales in September, representing a 3.4 per cent improvement compared to the 3,441 sales in August of this year. The Real Estate Board of Greater Vancouver released these figures on Friday but few seemed surprised.

As a direct consequence of stronger sales figures, prices and benchmark prices (the average price of the standard home in any given market) have also risen. In fact, prices were about 1.6 per cent higher in September compared to earlier this year and main of the losses seen since the peak prices of the summer of 2008 have been recovered. Experts are pointing to low interest rates as the key motivating factor for market recovery as rates reached record lows this May. Despite small increases in mortgage rates since May, figures are still low which is prompting many first-time buyers to enter the market.

Speaking specifically about mortgage rates, there are numerous examples of impressive figures being offered to home buyers. In May, Coast Capital Savings offered 3.79 per cent on a 5 year fixed mortgage which has increased only slightly to date. In fact, they are offering an attractive rate of 3.85 per cent until November according to credit union representatives. This has lead to a staggering rise in new mortgages. This most recent quarter has seen the number of mortgages over $100,000 triple compared to the first quarter of 2009. Likewise, BMO Bank of Montreal has also offered enticing low mortgage rates such as their five-year variable rate at prime which is down more than 2 per cent down from prime plus 0.3 per cent which works out to 2.55 per cent. Rates like these make homes much more affordable which is likely why the stream of first-time buyers has been so strong. Indeed, in Surrey, Abbotsford and Mission, first-time buyers were responsible for almost a third of sales.

Renewed real estate interest has been spurred by these low rates and while housing prices are increasing they're still down overall. The modest drop in prices currently seen in the market hovers around 2.9 per cent which isn't likely to explain increasing sales. The combined effect of low rates and discounted prices is certainly a motivating force for many buyers. Affordability cannot be explained by low prices alone and some markets are still struggling. The Fraser Valley saw an 11 per cent drop in sales from August to September which is likely due to a sales cooling trend which is normal after the summer months. Nevertheless, there is some concern that lower sales in the next few months may signify that the real estate market is not out of trouble, yet.

While sales were down in the Fraser Valley prices increased slightly which may partly explain why sales were down. On the other hand, both Greater Vancouver and the Fraser Valley saw impressive sales improvements this September compared to a year ago. Banks and businesses were in turmoil in September 2008, the stock market began plummeting, and real estate suffered severely. This year, things appear much better. In Vancouver, sales in September 2009 were almost double those figures in 2008. Similarly in the Fraser Valley, sales figures for September 2008 show 980 sales while September 2009 sales drastically improved to 1,590. These are shocking figures indeed but as a point of note, September of last year was a particularly difficult month across all sectors. Experts seem to agree that the market is showing strong, steady, and healthy recovery. Some may argue that the market is overheated, but this strong pace can be explained by a number of factors that will remain stable for the foreseeable future. Economic improvements along with an improved jobs scene and low mortgage rates are all combining to boost real estate figures. In addition, some factors are helping to prevent the market from overheating. For example, inventories in the Vancouver area are on the rise which keeps pricing wars from impacting sales figures.

Nevertheless, benchmarks are also beginning to rise in some markets and in Greater Vancouver the September 2009 benchmark price for a detached home was up 2.1 per cent from last September at $741,632 and $726,331 respectively. On the other hand the benchmark price for a detached home in the Fraser Valley was $491,404 this September which is a 1.5 per cent drop from the same figure of $498,822 last year.

Vancouver Leading a National Resurgence in Home Sales

2009-09-23T16:36:00.000-07:00

With falling mortgage rates and housing prices, the national real estate market has clearly started to rebound. Leading all regions in Canada, Metro Vancouver saw a drastic 117 per cent raise in home sales from August of 2008 to August 2009. Recent statistics released by the Canadian Real Estate Association shows that 42,483 homes were sold in Canada in August of 2009 which is surprising to most real estate experts.

Metro Vancouver's dramatic increases in sales while appearing to lead the way to a national real estate resurgence are likely the result of a more complicated picture. First of all, many will remember that Vancouver real estate sales peaked much higher than most of the country and then dropped off very significantly as well. So while the low points in the local real estate market have been some of the worst across Canada so were the peaks and this generally typifies the scene in Vancouver.

Meanwhile, the real estate market serves as a kind of microcosm of the recession in general. The economic downturn was disturbingly sharp but the recession itself has been very short. Housing sales in Vancouver and Canada likely reflect this trend and with other market forces, like the Olympics, driving development in Vancouver the 117 per cent jump in resales was almost predictable.

The figures are as follows. In BC, 8,565 homes were sold this August which represents a 67 per cent hike from one year ago. Comparatively in Alberta, sales figures were also up but a mere 7.5 per cent from August of 2008. Likewise, Ontario and Quebec saw marginal improvements in their real estate pictures with 18,607 homes sold showing a 16 per cent increase and 5,709 homes sold representing a 5.2 per cent increase respectively. While the national picture is not as impressive as the improvements seen in Vancouver, the 42,483 resales tallied demonstrate not only an increase (of 18.5 per cent) in sales compared to last August but also the 3rd consecutive month that year-over-year gains have topped 15 per cent. Still, these improvement fall short of the peak set in August 2007 as we’re still about 6.6 per cent below the national figure for total sales.

Lower Mainland Property Values Closing in on Peak

2009-09-10T16:38:00.000-07:00

Most recent reports about the future of real estate in the Lower Mainland have been optimistic. Real estate prices continued to rise in August and are now within 3 per cent of their peak from just over a year ago. Real estate boards throughout Greater Vancouver and Fraser Valley have been benefiting from year-to-year gains for the past few months and while many experts are surprised by the resiliency the market is showing, buyers seem more concerned with cashing in on low mortgage rates.

Indeed, the real estate market has been hotter than our early summer weather but questions about the stability of the market remain. Experts are reluctant to boast about recovery as they are more than aware of the impact of recent low mortgage rates. The market may or may not maintain its current pace once interest rates begin to creep up again. Nevertheless, early data clearly indicates resurgence in real estate throughout the Lower Mainland.

At the moment, the past 5 months have shown steady and consistent improvements in the number of homes sold as well as average prices. Without question, these gains have been buoyed by low-mortgage rates and unprecedented numbers of pre-approvals. First time-buyers have had a unique opportunity to take their first steps on the property ladder but whether this trend will continue when mortgage rates rise is yet to be seen. With housing prices seeming rapid ascent back to their peak many real estate experts are questioning whether recent market improvements are sustainable.
Mortgage rates over the past several months have reached record lows, as low as 3.65 per cent on five-year fixed mortgages and this fact is not being ignored. Many realtors are giving full credit to these low rates for the recent real estate recovery as many buyers were approved quickly at low rates and given 90 days to close deals before the rates expired. As such, buyers were essentially flooding the market in order to take advantage of these once-in-a-lifetime rates.

Still, backed by the return of consumer confidence and a variety of other signs that Canada is gradually climbing out of recession there is good reason for optimism. There has certainly been something of a buyers craze of late, with more than 3,400 sales in Metro Vancouver alone, and as a result prices are sneaking up again. Compared to August of 2008, there has been a 120 per cent rise in sales which is obviously going to have an impact on prices. More buyers mean more competition and bidding wars are becoming commonplace again. Indeed, some regions have seen new pricing peaks. One primary example is the west side of Vancouver where the average price of $1.4 million this August is a 3 per cent improvement over last year. Likewise, the east side of Vancouver has benefited from a 3.2 per cent increase from a year ago and several communities outside Metro Vancouver, such as New Westminster, Pitt Meadows, and the Sunshine Coast are showing year-to-year gains in average housing prices as well.

The level of sales and increasing prices has come as a shock. The forecast in January was bleak at best but the combination of lower prices, low mortgage rates, and reduced mortgage payments opened the flood gates for first-time buyers. Take the Fraser Valley as the prime example and you'll see that the region has seen only one busier August on record. Sales rose from 910 in August of last year to a staggering 1,786 this year. Similarly, from June to August local real estate boards recorded 5,857 sales which is nearly within 1,000 sales from the pinnacle in 2005.
In the Fraser Valley, the benchmark price of homes, which is calculated by averaging the price of the most common type of property sold, has risen 3.8 per cent since May of this year. While the benchmark is still more than 3 per cent below the figure last year there has certainly been marked improvement which is igniting optimism for realtors across British Columbia.

Keep in mind, many regions are still showing declines on the benchmark but there are some communities that are leading the way back to real estate stability. At the moment, South Delta, New Westminster, Pitt Meadows, Port Coquitlam, Vancouver East, and Vancouver West are the communities that are showing the biggest gains over a year ago while Abbotsford, Burnaby, Coquitlam, North Delta, Maple Ridge, North Vancouver, Port Moody, Richmond, Surrey, and West Vancouver are still putting up decreased figures.

Are Vancouver real estate woes over?

2009-08-27T16:58:00.000-07:00

As has been the case throughout North America and even parts of Europe, the real estate market has seen dramatic drops in prices and sales over the past year but the Metro Vancouver market finally appears to be heading toward the light at the end of the tunnel. After 11 consecutive months of decline, June brought more sales and a rise in housing prices. In addition, three other major metropolitan areas in Canada have also shown signs of recovery prompting the National Bank of Canada to predict the worst of real estate deflation to be behind us.

Real estate statistics for June show that average housing prices in Vancouver increased about 1.6 per cent compared to May but were still down more than 10 per cent from August 2008. Still, across Canada there seems to be a definite shift back to a sellers market. Traditionally determined by the number of sales versus new listings, the past several months have clearly been beneficial for buyers. With a surplus of listings and favourable mortgage rates, first time buyers have been a major motivating force in the real estate market recovery. Experts at the National Bank consider the new real estate environment, one with fewer listings and more sales, to be suggestive of further improvement in home prices from month to month meaning that the worst of our real estate woes are likely over.

The Teranet-National Bank index, which is based on repeat or paired sales of homes thereby directly representing changes in value instead of the average value of homes sold in a month, has shown that the number of paired sales in Metro Vancouver has increased for the first time since May 2008. This also suggests a real estate market rebound. Again, it appears as if relaxed mortgage rates and sagging house prices has attracted buyers to the market. At the moment, the demand for houses is also improving due to economic optimism and low interest rates. In fact, average monthly mortgage payments have decreased by nearly 25 per cent since the end of 2007. Add this to the fact that interest rates are expected to remain low for the foreseeable future so buyers are not at risk of higher mortgage rates.

On a related note, real estate market trends are also indicating that the United States is also starting to see improvement. The subprime mortgage debacle, which luckily Canadians were spared from, saw staggering drops in housing prices as they fell more than 30 per cent from their highest values in 2006. For the past 2 months housing prices have been showing signs of a rebound as sales of new homes are exceeding expectations. In fact, July saw the largest increase in sales in the past 4 years as they increased by 9.6 per cent. A total of 433,000 homes were sold in July of this year.

Many experts are relating the improvement in the real estate market to overall economic recovery. Increasing housing prices are an indication that households have more to spend. Four of the major markets in Canada are seeing a return to strength which not only signifies an improved real estate market but perhaps an improving economy as well. Montreal, Ottawa, Toronto, and Vancouver have all seen improved real estate numbers while Calgary and Halifax were the only areas to continue with declines.

Record Real Estate Sales for July in the Lower Mainland

2009-08-14T10:51:00.000-07:00

July was a good month for real estate in the Lower Mainland. As first time home-buyers were drawn out by lower prices and interest rates both Metro Vancouver and the Fraser Valley saw impressive sales figures for the month of July.

Statistics show that realtors in the Lower Mainland inked 4,114 sales in July of 2009 which is nearly a 90 per cent increase from the same month last year. This jump in sales is most likely due to lower prices and interest rates. Indeed, the average price of the standard single-family home was down more than 5 per cent from July 2008. However, the average of $711,702 last month is a 10 per cent increase from the beginning of this year. Similarly, the Fraser Valley recorded 2,089 sales this July which marks a 62 per cent rise from one year ago. Most interestingly, the previous record for July sales in the Fraser Valley was set in 2005 when 2,051 sales were recorded.

The story continues in the same vein as the price of an average Fraser Valley detached home was down from last year but making improvement compared to 3 months ago. In fact, while the average price of $477,420 dipped nearly 6 per cent from last year there has been about a 4 per cent rise in prices compared to April 2008. First time buyers appear to be the culprit behind these sales boosts. Moreover, as sellers part with their homes they also enter the market, usually taking a step up on the property ladder. The case seems to be that the first time buyers from a couple of years ago are now selling to today's first time buyers and are thereby on the market for new homes as well. Assisted by low mortgage rates, home owners feel comfortable taking the step to pricier homes.

Tales of trading up seem to be everywhere these days. Owners of one-bedroom condos are cashing in and moving on to two-bedroom units as the market continues to be flooded with first-time buyers. As the market has dipped slightly buyers are showing more interest which gives current home owners the option to move on to better properties and everybody shares in the savings.

With economic conditions still uncertain the recent strength of the real estate market has been surprising. In all likelihood, the market is beginning to stabilize again and the extra activity may be due to the perennial trend of increased sales during summer months. Still, the economic situation appears to be settling but this does not account for the rise in sales. In fact, long-term mortgage rates are already starting to rise which suggests that first time buyers may have a limited window of opportunity to cash in. Many real estate experts agree that it is difficult to foresee conditions that can support the current level of sales. While the market is not likely to crash again, increase mortgage rates and more economic confidence suggest that housing prices will raise again and sales will certainly taper.

The employment situation in BC is also showing signs of improvement. While the availability of full-time jobs dropped recently there has been a stabilizing trend as of late. With the introduction of more jobs home buyers will be more confident about their ability to make a long-term commitment to a home. Whether or not the current sales trends are sustainable is yet to be seen. Some areas are seeing a move to a seller's market as inventories are not as robust as they once were. In fact, the number of listings in Vancouver has dropped 34 per cent over the past year and similar drops have been noticed throughout the Fraser Valley and Lower Mainland.
The real estate picture is still somewhat unclear. There are several economic factors still in question and increased sales may be the result of a temporary summer boon. However, for the most part experts are optimistic about the future of real estate in BC.

Vancouver Laneway Housing

2009-07-30T10:49:00.000-07:00

With high real estate prices and an ever-growing population, the city of Vancouver has recently been looking for ways to provide increased housing within the municipality while having as little impact on the local environment as possible. Now the city is moving ahead with a plan to do just that, one that involves the development of a new type of housing -- laneway housing.

By converting back-alley garages into small homes, the laneway housing plan will provide more housing options within the city without the requirement of additional space. More specifically, homeowners with a lot that is at least 33 wide will be allowed to build a 1 1/2 storey home in their back garden. Vancouver laneway houses can be a maximum of 750 square feet and must be at least 16 feet away from the back of the main house. The estimated cost of building an average laneway house is $150,000.

Although a small number of laneway houses have already been permitted in Toronto and Montreal, this will be the first time that such an option will be open to a large number of single-family lot owners in Vancouver. While allowing for increased population density within the municipality, Vancouver's laneway housing plan is also expected to provide renters in the city with more affordable options. And in Vancouver, where there is a significant lack of affordable accommodation, many people see that as a very positive aspect of laneway housing.

Others are looking forward to the development of laneway houses because they see the option as a solution to a variety of financial and living arrangement problems. For example, retirees or those approaching retirement who have recently lost significant savings during the recession view the laneway housing plan as providing them with affordable independent living options. Many families with children who are ready to move out on their own or with elderly parents also see laneway housing as a way of providing affordable, independent living close to the rest of the family.

However, not all Vancouver residents are looking forward to laneway houses appearing in their neighbourhoods. Many fear that their quality of life will be compromised as the increased population density brings more traffic, more noise and makes residential parking a nightmare. While city councillors are aware of these concerns, they believe that the local quality of life will not be adversely affected and that the plan will be a success in the long run.

At any rate, the project is ready to move ahead and, undoubtedly, the way Vancouver's laneway housing endeavour ultimately turns out will be a subject of interest for many Canadian and American cities looking for ways to solve their own space and affordability problems.