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Condo Prices Keep Rising in Vancouver

From the Real Estate Weekly:


Buyers, be prepared to bid high on Vancouver condos

Almost two-thirds of the condos sold in Vancouver proper last week went for over asking price



AUGUST 11, 2017 05:42 PM




Even as the summer sales slowdown deepens, the proportion of homes being sold over their asking price continues to hold steady – or even rise, in the case of Vancouver condos.

There were 16 detached home sales in Vancouver proper from July 31 to August 6 (registered sold as of August 10), exactly half went for more than their asking price. The biggest price leap was a fairly modest 6.24% above list, seen in the sale of an East Vancouver family home that sold for $1,805,000 after eight days on the market.

However, of the 69 condos that have so far been registered as sold the same week, 45 units – more than 65 per cent – went for over asking price. The median price of a Vancouver condo sold that week was $

In fact, the priciest home to be registered by August 10 as sold July 31-August 6 – not just in Vancouver proper but across the entire Greater Vancouver region – was a condo. A stunning 15th-floor Coal Harbour corner unit with 1,772 square feet of living space and the obligatory spectacular mountain views, it sold for $5,030,000 after 30 days, bucking the trend by going for $170K under list.

Townhouses (including half-duplexes and row homes) saw a very high median selling price last week at $1,215,900.

Of the 13 townhomes that sold the same week, seven were traded for above sticker price, including a one-bedroom, two-level townhouse in Fairview that went for nearly 40% over asking. This 747-square-foot home sold for $790,000, a whopping $235K above its $565,000 list price, after eight days listed.

The priciest townhome to sell last week was a luxurious waterfront Yaletown unit that sold for $3,490,000 after 48 days on market, $109K below list price.

And the most expensive detached house to sell that week, registered as of August 10, was a beautiful heritage-style, 2003-built house in MacKenzie Heights on the West Side, which sold for $3,410,000. This four-bedroom house took 17 days to sell for $130,000 under asking.

Even though total listings and median days on market increased for every home type, compared with the previous week, so did the median list price in every category, for all Vancouver homes listed as of August 10.

REW stats

Joannah Connolly is the editor of


© 2017 Vancouver Courier

"Bubbles and Booms in Canadian Real Estate"

The Broader Effects of Morneau's Changes to Mortgage Qualification Rules

I think this article points to the broader implications of our government artificially messing with mortgage qualifications.  The impact is not only on first time buyers but also on move up buyers and on the entire construction industry ultimately
From:  REP
Economist predicts the real fallout from new mortgage rules

Economist predicts the real fallout from new mortgage rules

If you haven't heard about the new mortgage qualification rules by now, then take a moment and read up the ways in which the new mortgage rules will impact first-time home buyers.

Experts and laypeople alike are starting to come to terms with the new mortgage regulations, what it means for the current housing market and what it means for anyone planning to buy a home in the near future. But in a report released this week, economist Will Dunning, chief economist for Mortgage Professionals Canada, laid out what he thinks to be the longer-term impacts of the changes in a report titled “Slamming on the Brakes: Assessing the Impacts of Changed Criteria for Mortgage Qualification.”

Since this is only the first week of the new mortgage regulations, and aspects of it won't be rolled out for another month at lease, there isn't enough data to tell the true fallout. Experts, however, say that housing market activity nationwide may be reduced by anywhere from six to 10 per cent. “This would be the initial, direct impact,” Dunning wrote. “Second round effects (reduction in move-up and move-down buying activity) have the potential to double the impact,” which he concludes would fall somewhere between 12 and 20 per cent.

And, he mentions, these effects will occur in all parts of the country, not just in Toronto and Vancouver, the two markets that have been raising the average home price for Canada and that have been being watched very closely -- and reported on widely for months on end. Apart from those markets, housing affordablity nationwide has been fairly balanced, apart from slight dips and slow rises here and there. To think that the rest of Canada will remain untouched is unrealistic; Dunning expects that these areas “will move from balance to weakness; the really hot markets (now Toronto and environs, but formerly also Vancouver) will move from ‘extremely hot’ to ‘hot’.”

Dunning also expects there to be wider economic impacts of the mortgage rules in the way of job growth and creation, something which home builders and developers have been saying for quite some time. “A third effect from this policy change is that job losses that occur as a result of a weakened housing market would further reduce housing market activity (in turn, further aggravating the economic effects).” Slower housing market activity means fewer housing starts, fewer housing-related jobs, and if people don't have jobs, they, in turn certainly won't be buying any houses. According to Dunning, a “15% reduction in housing starts would cost about 50,000 jobs in construction and other industries that contribute to the construction process.” And this doesn't just affect home buyers. Fewer home buyers means more renters, and a tighter rental market is equal to a lower vacancy rate and higher rents. The Bank of Canada predicts that economic growth won't pick up until 2018 based on current information, and dampening a housing market on top of a sluggish national economy could have effects that the government, while they may have considered, would certainly want to avoid.

As to what Dunning thinks about the stress tests, he says posted mortgage rates have an “artificial existence” in the first place because they aren't determined by market forces and they “provide no guidance” as to what interest rates will be in the future. Using this standard to determine whether or not home buyers will be able to afford their mortgage is “unnecessarily cautious” and the next steps of the policy should go so far as to “establish an alternative benchmark interest rate through an explicit assessment of risks for interest rates. This requires urgent attention.”
This is a lot of doom and gloom and ‘ifs’ to absorb. This, however, is exactly where individuals can have a big impact in how the housing market changes in the months and years to come. We as individuals have no say in changes in mortgage guidelines. We do, however, have a say in what we do with that information. Whether that means not selling our home because we don’t think we’ll be able to find another one or changing our retirement plans to downsize much earlier because we’re expecting home prices to fall before we’re really ready to sell, every choice that we make regarding housing is determined by how much we buy into forecasts, expert opinions, and predictions. All of this talk about housing bubbles that we’ve heard on newspapers, television, and yes, on the internet, have spurned many of us to buy homes before we were really ready, in order to ensure that we could buy a home at all. But, Dunning says, there’s another side to that.

“Much less talked about is that there is an opposite to a bubble: if potential home buyers expect that house prices will fall, and decide not to buy as a result, then this can become a “self-reinforcing expectation”, which is also dangerous for the market and the broader economy,” he writes. “If the weakened housing market causes consumers to expect (or fear) that house prices could fall, this would reduce housing demand, further impairing the economy.”

It will be months before we see true impacts of these changes play out. Home sales data released in early 2017 will affect home prices, which will determine which way that we – home buyers and home sellers – react and make pricing decisions. Dunning also says that the impacts on mortgage lending will also take time to appear, because the mortgage funds are advanced when the sale is completed not when the sale is agreed, and because there are reporting and publication lags for the data.

Everyone seems to be on the same page that these new measures will slow housing activity and, in turn, housing prices. How much remains to be seen. But Dunning thinks that there may also be some unintended consequences, such as removing the incentive for borrowers to choose a longer-term, fixed-rate mortgages and borrowers going for the shorter-term mortgages with the lower interest rates. And changing mortgage competition among lenders could result in higher interest rates, both for new home buyers and homeowners renewing their mortgages.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate



Media's Misinformation

President Darcy McLeod issues letter to The Vancouver Sun

The following letter was issued to The Vancouver Sun for publication earlier today:

Letter to the editor:

I am concerned about information presented in Lori Culbert’s March 19 article “Flipping on the rise, but still a small portion of sales.” The article listed the “top 10 most lucrative house flips.” Our analysis through the MLS® system found that seven of these ten homes were not “flipped,” but instead rebuilt and re-sold. In some cases, a laneway house was also added to the property.

The implication that these homes were re-sold as-is for a quick profit is false and it misleads your readers.

The Real Estate Board of Greater Vancouver, and the 12,500 REALTORS® we represent, encourage an open public discussion about today’s real estate market. We believe, however, that the information that informs this discussion must be presented factually and in proper context.

Yours truly,

Darcy McLeod
Real Estate Board of Greater Vancouver

Knight Frank Report Names Vancouver Leads Hottest Real Estate Market Worldwide

Changes to Minimum Downpayment For Homes Over $500,000.

From The Globe and Mail


The Liberal government is raising the minimum down payment for new insured mortgages to 10 per cent from 5 per cent for the portion of house prices above $500,000.

The new rules will take effect on Feb. 15, 2016. Down payment rules for mortgages for properties below $500,000 will be unchanged.

The move is aimed at cooling overheated housing markets in Toronto and Vancouver but that could risk exaggerating a home price correction in the Prairies.

Ottawa raises minimum down payment for costly homes ( CP Video )

At a news conference in Ottawa, Finance Minister Bill Morneau said Ottawa’s move is targeted at “pockets of risks” in the Toronto and Vancouver housing markets.

“This will impact 1 per cent or less of the market. We think it does it in a very targeted way,” he said.

The finance minister said the government looked closely at what the changes might mean for this will mean for the struggling Alberta economy.

“We considered the fact that the Alberta situation is challenging. We want to make sure that we’re doing things that don’t negatively impact that market and in fact that’s one of the reasons why we were very careful about exactly what we did and only impacted those homes over $500,000 up to a million,” he said.

“We’re not talking about bubbles here. We are talking about ensuring that Canadians take the right approach to investing in a home. It’s to protect the market for the existing home owners and it’s to protect new home buyers as well so that they have the appropriate amount of equity in their home,” he said.

Ottawa had previously restricted its mortgage insurance to homes valued at less than $1-million, so the minimum down payment for more expensive homes remains unchanged at 20 per cent.

“The Ministry of Finance is touching the untouchable,” said Canadian Imperial Bank of Commerce economist Benjamin Tal.

While the move represents the most significant tightening of mortgage rules since Ottawa implemented the minimum 5 per cent down payment in 2008, the effect may be smaller than expected, writes Mr. Tal.

Just 17 per cent of home sales across Canada over the past year were for between $500,000 and $1-million, although that figure rose to 33 per cent in Vancouver and 40 per cent in Toronto.

Roughly 23 per cent of outstanding mortgages in Canada are considered “high-ratio,” with owners requiring government-backed mortgage insurance, meaning the rules will affect less than 4 per cent of new mortgages, writes Mr. Tal.

Average resale home prices rose an annualized 9.4 per cent in November, the Toronto Real Estate Board reported, while the Greater Vancouver Real Estate Board said benchmark prices for homes in the Metro Vancouver area rose nearly 18 per cent since last November.

The share of properties valued at between $500,000 and $1-million is actually smaller in Toronto and Vancouver than given that sizzling markets have pushed many properties, particularly detached homes, over the $1-million mark.

Sizzling markets have pushed the prices of many homes, particularly detached houses, above the $1-million mark in Toronto and Vancouver, pushing out many of the first-time buyers who would most likely be affected by the new rules. A survey earlier this year by private sector mortgage insurer Genworth MI Financial found the average down payment among first-time buyers in Toronto and Vancouver was 20 per cent.

The new rules will likely affect just 5 per cent of new sales in Toronto, and just 2.5 per cent in Vancouver, writes Mr. Tal. But will affect nearly 10 per cent of sales in Calgary, where homeowners tended to have relatively small down payments.

“The overall impact will be felt only at the margin, given the relatively small segment of the market that will be impacted – even in the target markets.”

Even so, the government’s move has widespread support, according to a RE/MAX survey released earlier this week that found two thirds of Canadians agree that the minimum down payment for a home should be at least 10 per cent.

Canada Mortgage and Housing Corp. also announced it was raising the limits on its government-insured mortgage-backed securities program to $105-billion in 2016 from $80-billion this year. The program is an important source for lenders, allowing them securitizes insured mortgages and sell them to investors, with Ottawa providing insurance on both the mortgages and the mortgage-backed securities themselves. The amount of government-backed securities that individual lenders can issue each year was raised from $6-billion to $7.5-billion. CMHC said it was hiking the fees it charges to lenders who go over the prescribed annual allotment, but would lower the fees for lenders who used the government’s Canada Mortgage Bond program.

“The revised fee structure is intended to encourage the development of private market funding alternatives by narrowing the funding cost difference between government sponsored and private market funding sources,” the federal housing agency wrote.

The Wild Ride of The Vancouver Real a Estate Market




daily market update 189949


Vancouver sees sharp increase in March sales
Vancouver’s residential property marketwas busy in March with MLS sales up 32.6 per cent from February and 53.7 per cent from March last year. The total number of sales recorded was 4,060. Data from the Real Estate Board of Greater Vancouver also reveals that last month’s total sales figure was 26.8 per cent above the 10-year average. The board’s president Darcy McLeod says that there is strong competition with multiple offers, which is great news for sellers: “The number of homes for sale today is below what’s typical for this time of year. If you’ve been considering putting your property on the market, these market conditions indicate that now may be a good time to list.” That said, the number of listings was 13 per cent higher in March this year than the same month last year and new listings were up 4.7 per cent. All property types saw large increases in sales year-over-year: apartments up 47.1 per cent, detached homes up 53.3 per cent and attached properties up 72.3 per cent. McLeod added that buyers are acting fast: “For sellers, this means that it's taking less time, on average, for your home to sell if you have it priced correctly for today's market."
Home prices now almost a “two-city phenomenon,” says Kavcic
Toronto and Vancouver are the only cities seeing home prices grow above the average, according to a report from BMO’s Robert Kavcic. Elsewhere in Canada prices are below average, he says, with the long-awaited “soft landing” in many markets and a “harder” one in Alberta and Saskatchewan. The report also highlights that price growth in Toronto and Vancouver has been mainly driven by single-family homes while condos have seen a more moderate rise. This, says Kavcic, is because the ‘new baby boomers’ are now entering their mid-30s and want to move up to family homes; and, with condos having been the main focus of developers in recent years, there is a lower supply of houses.