The Latest Vancouver Real Estate Stats - Will Prices Keep Going Up or are we expecting a time of Balanced and Sustainable Growth in the Lower Mainland

Experts Remain Confident in Vancouver Real Estate Housing Market

Credit Union of B.C. remains confident in the B.C. housing real estate market, and the respected group is not alone. CUCBC chief economist Helmut Pastrick anticipates B.C. house prices rising up to 12 per cent in 2008 and moving up again in 2009 by 12 per cent to 14 per cent. Pastrick, however, also cautions that poor affordability is the main constraint on the current new B.C. housing real estate market. Yet, housing starts in January and February were up 47 per cent over the first two months of 2007 in the Vancouver metropolitan real estate area, an indication that others also remain bullish. Meanwhile, Royal LePage survey has found that healthy year-over-year house price gains in Vancouver real estate were recorded during the first three months of 2008. While more modest price increases were observed when compared to previous quarters in the new Vancourer real estate property market, the solid appreciations are largely due to the shared effects of resilient local economies , high migration levels, and relatively low interest rates. This all points to enduring home buyer demand in Vancouver property, according to Royal LePage. While almost all real estate Vancouver markets surveyed experienced price increase in housing, it was the smaller cities, with relatively affordable housing and strong economies based on resources industries that emerged with the most significant gains. Thriving Saskatoon saw appreciation as high as 66 per cent, while areas in Newfoundland posted increases above 20 per cent for the first time since Royal LePage started tracking Canadian house prices.

Of the housing types in Canada surveyed nationally, detached bungalows increased to $336,834 (up 8.3 percent), followed by standard two storey properties, which rose to $400,647 (up 7.1 per cent) and standard condominiums, which increased in price to $240,423 (up 6.9 per cent), year over year. House prices in Vancouver real estate and Victoria property continued to climb during the first quarter of 2008 due to strong local and international home buyer demand. In Vancouver, the upcoming 2010 Olympic Games have added extra fervor to the already strong economy. The city’s high employment levels and relatively low cost of borrowing money conteinues to attract an in flux of new homebuyers to the Vancouver real estate market. While affordability in Vancouver appears to be decreasing, current rising wages and relatively low interest rates enable homebuyers to enter the housing market.

Vancouver Home Foreclosures Rising: Real Estate Expert

According to Sam Cooper, a Staff Reporter for the North Shore Outlook newspaper: Real estate foreclosures on the North Shore and across the Lower Mainland are on the rise and the trend is expected to accelerate in the next few years, according to an expert. Kap Hiroti, a real estate investor in Vancouver who started a business gathering and selling data on B.C. foreclosures in 2006, says foreclosure listings have jumped in the past year. Back in 2006 an average week would see about 10 Lower Mainland foreclosure Vancouver listings, but now it’s clower to 20, Hiroti said. The reasons behind rising foreclosures is unprecendted lack of affordability and borrowers over-extending themselves to purchase homes, Hiroti explained. “We have people drawn to (purchase homes in) North Vancouver and West Vancouver, and find they can’t afford it,” Hiroti said in an interview Monday. So far in 2008 there have been three foreclosures in North Vancouver and three in West Van. There have been six in the Squamish Valley and three in nearby Whistler. “We are expecting to see (Vancouver foreclosure listings) go up in the next couple years,” Hiroti said. “I’m expecting some real movement as we get into 2010 and beyond.”

Hiroti said about 80 per cent of provincial B.C. foreclosures come from the Lower Mainland real estate market, with Vancouver and Surrey accounting for almost 40 per cent. Hiroti said most of the current Vancouver foreclosures listings result from loans taken out int eh past six to twelve months – as financially over-extended home buyers default or walk out of high-raio (little money down) loans with amortization periods up to 40 years. Hiroti said the new long-period loans allowed home buyers into a pricey Vancouver real estate market, but as they discovered they couldn’t keep pace with interest and payments, they hit the finanical wall. While Hiroti is predicting a big rise in Lower Mainland Vancouver foreclosures in the next few years, he doesn’t believe it will approach the tsunami of foreclosure listings hitting the United States now. In the wake of an excessive real estate market of “sub-prime” loans given to borrowers with questionable credit, the American housing market has collapsed as buyers eject out of huge loans and rapidly devaluing homes. At the same time, tightened lending resulting form the crisis has choked off real estate market entry for many prospective buyers.

Hiroti said American lenders were far more agreessive than their Canadian counter parts and thus the Canadian real estate market should be insulated from the debacle taking place in the United States. “Canada has some sub-prime lenders but not to the same extent as the U.S.,” Hiroti said. “Our credit is clamping down here (but) itn’s not a crunch.” Hiroti said he believes “fairly low” interest rates and continued popularity of 35 to 40 year loan products will mean stabilization of prices in Canada’s “softening” real estate market and lead to a stable Vancouver foreclosure property market. “We’re not going to see anything like (the dip) in the U.S. (real estate market or foreclosure listings.” In a series of reports this month, Cameron Muir, chief economist for the British Columbia Real Estate Association, signaled a shift to a more buyer friendly real estate market in Vancouver. “Some weakness on the export side of the economy and eroding affordability will have an impact on housing demand over the next two years,” Muir said. B.C. home sales were down 14 per cent in the first quarter of 2008, while active listings were up 24 per cent, according to Muir. “more balance between demand and supply means less upward pressure on home prices. It also reduces the chance of multiple bids on the same (Vancouver home), giving homebuyers more time to investigate properites thoroughly before purchasing.” Home buyers in Vancouver who want to access the Vancouver foreclosure real estate market can sometimes negotiate deals below market value, depending on the financial situation of the owner, Hiroti said. DealSpeak Inc.

Vancouver Housing Market Cools

According to Jeff Nagel for the Black Press and published in the North Shore Outlook newspaper: The once-hot Lower Mainland housing real estate market has cooled significantly, new stats show. Real estate stats for May in Vancouver show home prices have posted only small gains so far in 2008. Detached house prices are up about 5.5 per cent so far in 2008 in both the Greater Vancouver and Fraser Valley realty areas ito $771,250 and $549,610 respectively. Greater Vancouver townhouses sold for 4.8 per cent more in May ($479,000) while condos were up 3.1 per cent to $390,000. Fraser Valley townhomes and condos are both up less than one per cent for the year so far to $341,000 and $229,700. Both those average selling prices marked a slight drop from April. Both real estate boards reported a sharp drop in sales and many more new housing listings from prospective sellers compared to a year ago – continuing evidence of a softening Vancouver and Fraser Valley real estate market. “Prices are not increasing as rapidly – now down to single digits overall – which is good news from an affordability standpoint,” said Dave Watt, president of the Real Estate Board of Greater Vancouver. Greater Vancouver real estate sales were down 33 per cent in May from a year earlier. Fraser Valley sales in housing real estate were off 26 per cent and active listings surged 33 per cent in May. “We’re experiencing a return to more normal market conditions,” said Kelvin Neufeld, the Fraser Valley Real Estate Board president. CMHC has predicted residential price gains in housing in Vancouver of eight per cent this year and five per cent in 2009. That would end four straight years of double digit growth. Analysts say a US style housing market real estate collapse here is unlikely, thanks to Vancouver’s job and population growth trends and its constrained geography up against mountains, ocean and the U.S. border. The Greater Vancouver real estate stats count Metro Vancouver except Surrey, Langley, and North Delta, which are tallied in the Fraser Valley real estate numbers.

Greater Vancouver Home Sales Inched Higher in January

According to the REW weekly for Greater Vancouver, Housing sales across Greater Vanocuver inched slightly higher in January compared to a year earlier, while listings of homes for sale also increased. The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales totalled 1,819 in January 2008, an increase of 0.7 per cent over January 2007, and a 5.5 per cent decline form January 2006. New listings also climbed 14.9 per cent compared to January 2007. In contrast January 2006, new listings from this January rose more dramatically up 34.7 percent. “with new listings outpacing sales increases to start the year, it appears the real estate market is heading toward more balance,” says REBGV president. “the result will be welcome for consumers looking for more time to undertake due diligence before making a buying or selling decision.” Sales of apartment properties in Greater Vancouver in january 2008 rose 11.7 percent to 860. The benchmark price, as calculated by REBGV’s price index, of an apartment property increased 13.8 per cent to $378,336. “It was clearly on the strength of the apartment sales that overall residential sales figures increased in January,” says Naphtali. “there’s clearly been a trend over the past decade toward growth in the high density condo market. More and more consumers are purchasing apartments.” Attached property sales declined 6.7 per cent to 318, compared with January 2007. The benchmark price of an attached unit increased 12.4 per cent to $462,627. January 2008 sales for detached houses decreased 7.8 per cent to 641 from the same period in 2007. The January benchmark price for detached properties in Greater Vancouver’s real estate market rose 15.7 perc ent to $742,490.

BC Construction Leading in Canada

52,000 jobs created in the field, census shows and written by Kristen for Metro Vancouver magazine in March 2008. British Columbia’s booming construction real estate industry helped make the trade one of the fastest growing labout fields in Canada, a study released yesterday found. Nearly 52,000 construction jobs in BC were created between 2001 and 2006, making up one quarter of the province’s job growth according to Statistics Canada’s report on labour mobility. In Alberta, real estate construction sector increased by 39,700 jobs during the same period. The expansion in BC is attritubted in part to the buildup to the 2010 Olympic Games. Mak Kader, who works for Graham construction, moved to Vancouver in September after two fruitless years searching for a real estate construction related job in Toronto. “It’s better wather, better pay and benefits, and better hours,” he said in Vancouver.

Real Estate Market Forces, not Olympic Games, To Drive Vancouver Property Demand

Published in the Real Estate Edge on February 23, 2007 and written by Monte Stewart. Forum looks to future of housing growth in the Greater Vancouver region. The 2010 Vancouver Winter Olympics will not be a big driver of new housing demand, predicts a leading residential real estate market analyst. Traditional market forces – not the Games – will still be dictating demand around 2010, says Jennifer Podmore, managing partner of MPC Intelligence. MPC Intelligence updates companies monthly on residential real estate projects in Vancouver, Victoria, the Interior and Calgary through its website (www.mpcintelligence.ca). Clients include real estate developers, builders, lawyers, architects, and municipalities. Podmore recently spoke at a panel discussion at the Buildex 2007 conference on the future of the Greater Vancouver real estate property market.

She noted that today’s prices will go up only slightly between now and the Olympic Games. “But the big message that we’re giving our clients is that they have to plan in today’s dollars for tomorrow’s market,” she said in an interview. “By the time the Olympics hit, that’s going to be our eighth consecutive year of real estate market growth, if we keep going in that way,” she added. “No market – no matter how healthy and sustainable you are, and how great your economic indicators are – can handle that sort of sustained long-term growth.” Real estate developers in Vancouver recognized long ago that the Olympic Games would not be a huge source of residential demand. And this year, Podmore predicted, the Greater Vancouver residential market won’t see the same rapid escalation in prices that it has in the past couple of years, purely as a result of reduced affordability and because most home buyers are “end users” – people who will actually live in the homes – rather than real estate investors.

MPC is monitoring 2,100 residential projects, which contain more than 71,000 units, that are now in the planning and construction stages. High-rise condos make up the bulk (4,335) of 8,674 new units expected to come on the real estate market in the near future, while low-rise (1,691) and townhomes (767) rank second and third, respectively. In the future, Podmore expects real estate developers to build more woodframe condos, which cost less than concrete structures. The high cost of concrete has repeatedly been cited as a prime cause of construction-cost increases in the past few years. Podmore forecasts that the downtown Vancouver sub-market will have the highest unit cost this year - $825 per square feet, compared with $775 in 2006. Surrey and Langley will have the lowest at $390. Although the Olympic Games won’t affect housing demand, they will have a big impact on the industrial market, according to Russ Bougie, an industrial-property sales specialist with Colliers International. Bougie is expecting a sizable decline in industrial demand following the Games.

Now, however, industrial vacancy is at only 1.4 per cent. In other words, for every one million sq ft of industrial land, only 14,000 sq ft of warehouse space is available for lease in Greater Vancouver. “You don’t know how many calls I get from tenants looking for X amount of square feet with a dock or a loading door, and it doesn’t exist,” said Bougie. As a result, many companies are opting to operate several small locations rather than one large one, and firms are moving their operations further east toward the Fraser Valley. Home Depot opted to acquire property in Port Coquitlam for a 20,000 sq ft warehouse, he said, because it could not find a site closer to West Vancouver and Vancouver stores that the new facility will service. Bougie predicted an average lease rate of $110 - $120 per square feet. “Our real estate market has changed a lot,” said Bougie, referring to higher industrial-property prices. “I’m not complaining.”

The Olympic Games will also have an impact on demand for office space, said Andrea Walburn, research director for Cushman Wakefield LePage. “There are going to be a lot of short-term leases and a lot of companies (opening new offices) related to the Winter Olympics,” said Welburn. But this year, demand for office space, which has been extremely high the past few years, will start to ease. Approximately 12 to 15 floors worth of office space downtown may stabilize rental rates that have reached $40 per square foot recently. “Downtown, we’re about five per cent vacant – which is nothing,” said Welburn.

Burnaby and Surrey are poised to add more supply while New Westminster, which has a 16 per cent vacancy rate and is not an overly attractive sub-market is making slow steady improvements. Meanwhile, strong demand is also expected to continue in the retail sector. But Curtis Redel, a retail specialist with Avison Young, indicated that real estate market will still experience some significant changes. Some planned real estate projects will be postponed as consumer spending slows down and a labour shortage continues beyond 2010. Today, the drivers of retail real estate demand are the strong North American economy, U.S. consumer spending and investment, downtown Vancouver’s population growth, street-front locations, the labour shortage and rising land prices. As a result, of these factors, local tenants have been pushed out by international chains.

Based on the number of people who sought out Podmore for one-on-one questions afterward, most Buildex conference delegates were interested in residential demand. “It was quite interesting,” said Rich Zalaudek, a realtor with Royal LePage. “They all wanted her to forecast what was going on. They all wanted the answers. People are relying on somebody else to get the answers and then go ahead and that, instead of trying to figure it out themselves.” He said the Olympic Games will have more of a long-term effect on residential demand. “We’re going to be on a world stage,” he said. “They’re going to go, ‘Wow, what a fantastic place.’ But I don’t think they’re all going to rush here and buy homes right away.”

The relocation of industrial properties and real estate to the Fraser Valley and elsewhere will help to balance the Greater Vancouver market as jobs and homeowners move with them, he added. “Since the prices of homes are so high, there is relief in the valley,” said Zalaudek. “(The average home price) is slightly less. I think (movement of industrial sites) is good. It’s spreading things out and making the whole Lower Mainland more liveable. It just makes more sense.” James Ko, project manager with Kozy Development Inc., a Vancouver-based multi-family home and commercial builder, said he was glad to hear expert speakers confirm real estate trends that he has already noticed. “The forecast, I think, is good,” said Ko. “They’ve got reasons behind what they’re saying. It’s a growing city. There’s a cycle.”