The Metro Vancouver Real Estate Thread

[Sheba]

Toronto home sales jump in October, even as Vancouver's plunge

Toronto home sales rose 11.5 percent in October from a year earlier, the industry group for the city's real estate agents said Thursday, contrasting with a sharp decline in Vancouver where a tax on foreign buyers has weighed on the market.

Activity in Canada's two most expensive housing markets has been closely watched by policymakers, who have taken steps to try to cool the sector in the hopes of avoiding a crash in prices later on.

The Toronto Real Estate Board said a record 9,768 sales were reported in October 2016. It said its benchmark home price index was up 19.7 per cent from a year earlier. The average selling price for all home types was C$762,975 ($570,000), a 21.1 percent rise over the same time period.

By contrast, data out Wednesday showed Vancouver home sales slid 38.8 percent from the same period in October, while prices remained up from a year earlier.

British Columbia introduced a foreign property transfer tax effective Aug. 2 in Vancouver in an effort to improve affordability in Canada's most expensive property market. Some industry experts have said the tax could steer foreign buyers towards Toronto instead.

Separately, the Canadian government said in early October it will tighten mortgage rules and close a tax loophole on home sales, seeking to rein in both foreign investors and indebted consumers in its latest move to cool a market that some have called a housing bubble.

"As we move through November and December, we will be watching the sales and listings trends closely, in light of the recent policy changes announced by the Federal Minister of Finance." Toronto Real Estate Board President Larry Cerqua said in a statement.

[whatnext]

Huh, looks like once you wring out foreign money, turns out we don't need to be building that many units after all:

Canada Mortgage and Housing Corp. says the pace of housing starts slowed in most regions of the country in October, with an especially big drop in British Columbia.

The agency says the seasonally adjusted annual rate fell to 192,928 units in October, down from 219,363 units in September.

The drop came as the seasonally adjusted annual rate of urban starts fell 12.1 per cent in October to 176,131 units. Rural starts were estimated at a seasonally adjusted annual rate of 16,797 units.

Multiple-unit urban starts dropped 15.3 per cent to 115,402 units for the month, while single-detached urban starts slipped 5.4 per cent to 60,729 units....
http://vancouversun.com/business/real-es...ts-slips-in-october-cmhc?__lsa=4b34-ea58

[jlousa]

Sales and prices had stalled a couple of months before the government intervened, in fact I posted that at the time. There was no rush to bring in bad policy and they could've taken their time and brought in something better thought out. All this policy did was pull the rug out from under everyone.

[whatnext]

Originally Posted by jlousa

Sales and prices had stalled a couple of months before the government intervened, in fact I posted that at the time. There was no rush to bring in bad policy and they could've taken their time and brought in something better thought out. All this policy did was pull the rug out from under everyone.

What good does a stall do when prices were allowed to spiral so far out of control? Again, a 30% correction takes us back just one year, hardly a
Götterdämmerung.

[whatnext]

Originally Posted by jlousa

Sales and prices had stalled a couple of months before the government intervened, in fact I posted that at the time. There was no rush to bring in bad policy and they could've taken their time and brought in something better thought out. All this policy did was pull the rug out from under everyone.

I forgot to add. A lot of realtors don't seem to be giving realistic advice to their clients wrt to pricing. Like this listing, nice building and nice view, but no way this ten year old suite is worth over $2 million:
http://www.rew.ca/properties/R2122207/1103-1428-w-6th-avenue-vancouver

[sacrifice333]

Originally Posted by whatnext

I forgot to add. A lot of realtors don't seem to be giving realistic advice to their clients wrt to pricing. Like this listing, nice building and nice view, but no way this ten year old suite is worth over $2 million:
http://www.rew.ca/properties/R2122207/1103-1428-w-6th-avenue-vancouver

Very well respected building(s) but at nearly $1500psf... I don't think so.

[whatnext]

Canada’s anti-money laundering watchdog found “significant” or “very significant” levels of non-compliance at more than half of the B.C. real estate companies it examined over a four-and-a-half year period, its records show.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the federal agency mandated to detect and combat money laundering, examined about 220 real estate companies in B.C. between 2012 and mid-2016, finding 112 companies with “significant” levels of non-compliance and five with “very significant” non-compliance, according to records obtained by Postmedia News through an access to information request.... (bold mine)
http://vancouversun.com/news/local-news/...encies-at-100-plus-b-c-real-estate-firms

Any you can bet the provincial regulator will take absolutely no tough action against the five with significant non-compliance.

[Vin]

Originally Posted by whatnext

Huh, looks like once you wring out foreign money, turns out we don't need to be building that many units after all:

Canada Mortgage and Housing Corp. says the pace of housing starts slowed in most regions of the country in October, with an especially big drop in British Columbia.

The agency says the seasonally adjusted annual rate fell to 192,928 units in October, down from 219,363 units in September.

The drop came as the seasonally adjusted annual rate of urban starts fell 12.1 per cent in October to 176,131 units. Rural starts were estimated at a seasonally adjusted annual rate of 16,797 units.

Multiple-unit urban starts dropped 15.3 per cent to 115,402 units for the month, while single-detached urban starts slipped 5.4 per cent to 60,729 units....
http://vancouversun.com/business/real-es...ts-slips-in-october-cmhc?__lsa=4b34-ea58

Oh trust me, demand it still there. It's just that the locals are waiting for prices to tank, and they obviously haven't, and hence the drop in sales. But realistically, how long can people just wait on the sidelines and watch while they continue paying someone else's mortgage?

[whatnext]

10% of Homes Being Resold in Vancouver Have never Been Lived In

...There’s Plenty Of Land, It’s Just Empty
There are currently 4,799 homes listed for sale according to the Real Estate Board of Greater Vancouver (REBGV), and 463 have never been occupied. This was determined by using voluntarily identifying language from the listing agents, having said things like “never been occupied” or “never lived in.” A total selling point for most buyers, but likely a point of contention for Millennials and activists....
https://betterdwelling.com/city/vancouve...d-in-vancouver-have-never-been-lived-in/

That's a pretty shocking stat. So much for the "build baby build" crowd. And a unit unoccupied since 1989?!

[Cypherus]

Originally Posted by Vin

Oh trust me, demand it still there. It's just that the locals are waiting for prices to tank, and they obviously haven't, and hence the drop in sales. But realistically, how long can people just wait on the sidelines and watch while they continue paying someone else's mortgage?

People will wait as long as it is feasible until prices ultimately correct. People are taking a wait and see approach because sellers have not adjusted their pricing to incorporate the foreign buyers tax, tightened mortgage rules, and higher interest rates of the big banks. In fact, two units in my building are being flipped for a $30,000 profit each from a recent buyer who purchased the units during the summer madness, totally ignorant of the fact that the market has changed. Likewise, presale prices are still high for new projects like the City of Loughheed despite being nowhere near Vancouver proper. People are being smart to stay away from residual greed.

[casper]

Originally Posted by whatnext

10% of Homes Being Resold in Vancouver Have never Been Lived In

...There’s Plenty Of Land, It’s Just Empty
There are currently 4,799 homes listed for sale according to the Real Estate Board of Greater Vancouver (REBGV), and 463 have never been occupied. This was determined by using voluntarily identifying language from the listing agents, having said things like “never been occupied” or “never lived in.” A total selling point for most buyers, but likely a point of contention for Millennials and activists....
https://betterdwelling.com/city/vancouve...d-in-vancouver-have-never-been-lived-in/

That's a pretty shocking stat. So much for the "build baby build" crowd. And a unit unoccupied since 1989?!

Is it that shocking? When a builder builds a new building he sells units to who ever walks through the door. In many cases that includes investors that have no plans to ever live in the building. Once the building is built they put the units on the market.

A united unoccupied since 1989 has to be rare and there is likely a story behind that.

[whatnext]

Originally Posted by casper

Is it that shocking? When a builder builds a new building he sells units to who ever walks through the door. In many cases that includes investors that have no plans to ever live in the building. Once the building is built they put the units on the market.

A united unoccupied since 1989 has to be rare and there is likely a story behind that.

Or they let them sit empty for a couple years before they get bored and move on. But the presale investment scenario is bad enough and what has led us into this bubble. Buyers purchase not with the expectation of buying a home, but that the commoditized unit will appreciate rapidly enough to cover all your costs and make a profit. If you want to see what kind of units that creates, check out the Trump Tower thread. Overpriced units with shitty layouts for actual living.

[NewfBC]

RE: Never lived in...

There are also units like this one in Vancouver Tower, 909 Burrard. Never lived in condition, used to store an art collection!

For rent - $6500/mth!

http://vancouver.craigslist.ca/van/apa/5872549370.html

Ron.

[Spork]

I knew somebody who was hunting hard to find a condo to buy. She had quite a bit of cash to spend as she had previously sold a house in South Granville, so her options were pretty open. She had also come across a large condo from the 80's that had never been lived in. I doubt the two are the same, so that means that there are more than just that one anomaly.

[whatnext]

Richmond - Ghost City

...But this appears a normal occurrence in Richmond. What I now dub The Ghost City. One that has been devastated by a market fluctuating with foreign demand. I decided to have a little fun with Richmond. I researched Brighouse, an area in Richmond with a plethora of condo buildings and a large asian population. Here’s what I discovered:

From January 2016-October 2016
471/1018 (46%) of condo sales were sold as vacant

Now, you could argue that some of these could have been new construction. So I ran the same search but this time the building had to be 1 year or older. The results:

From January 2016-October 2016
450/968 (46%) of condo sales were sold as vacant.

If we take away the Brighouse area the number of listings sold as vacant in Richmond drops to 27%. Queue my favourite video...

http://vancitycondoguide.com/the-ghost-city/

[trofirhen]

There have been (IMO) justifiable remarks that Vancouver is pricing itself out of the business market, and that companies won't establish here because housing is too expensive.
This of course would stifle the city, and turn it into an overgrown resort - as has also been mentioned - killing off chances for a truly diversified economy - like pharma development.
(I say this because the city has a strong basis potential here; just an example, of course)

The world has taken notice, it seems, and if anyone has the time to read these, they might be interested by them. The last one's the best ... IMHO,
although it's an older example from the one above SSP post by whatnext

https://www.theguardian.com/cities/2016/...ces-solution-super-heated-housing-market

http://www.zerohedge.com/news/2016-08-29/furious-chinese-envoy-slams-vancouver-real-estate-tax-local-housing-market-implodes

[whatnext]

Given the stat on how many resales were vacant, and therefore obviously purchased by foreign investors, it's no surprise to see that new multifamily sales have tumbled as well. Hopefully prices will correct after the New Year:

...Just over 3,000 new multi-family home sales were recorded in 2016’s third quarter, which is a decline of 34 per cent from the same quarter last year and a drop of 55 per cent from the six-year record set in 2016’s second quarter, said the report.

The figures run contrary to recent media reports suggesting that the new home market is bucking the downward trend seen in Metro Vancouver’s resale market. There have also been several press releases issued recently to media by developers citing recent presales successes.

“Some developments are doing really well, but there is an overall slowdown in the new home market,” Jon Bennest, principal at Urban Analytics and one of the report’s authors, confirmed to REW.ca. “There are a number of reasons for this, and the new foreign buyer tax is just one of them. In fact the market was already showing signs of cooling prior to the introduction of the foreign buyer’s tax.”...

http://www.rew.ca/news/new-home-sales-in...rt-1.2839717?rew.ca%2Fnews=rew.ca%2Fnews

[whatnext]

Single family Home sales continued their dramatic collapse in November, led by a whopping 64% fall in Richmond (foreign buyers not a factor, eh?). Condos, a market driven more by those who actually live and work here, remain stable.

http://vancitycondoguide.com/november-detached-market-report/

[Stingray2004]

Kinda an interesting read from Bloomberg News today:

Vancouver Housing Tax Pushes Chinese to $1 Million Seattle Homes
by Katia Dmitrieva

December 4, 2016 — 4:00 PM EST

Just a few days after Vancouver announced a tax on foreign property investors, Seattle real estate broker Lili Shang received a WeChat message from a wealthy Chinese businessman who wanted to sell a home in Canada and buy in her area.

After a week of showings, he purchased a $1 million property in Bellevue, across Lake Washington from Seattle. He soon returned to buy two more, including a $2.2 million house in Clyde Hill paid for with a single cashier’s check.

Shang says she’s been inundated with similar requests from China and Hong Kong after Vancouver’s provincial government enacted a 15 percent tax on foreign homebuyers in August to help cool soaring real estate values. With Chinese investors -- the largest pool of foreign capital -- looking for a place to put their cash, the unintended consequence of the fee has been to push demand to cities such as Seattle and Toronto.

“The tax was the trigger of this new wave of investment now coming to Seattle," Shang said. “Why pay more for the same thing?"

...

https://www.bloomberg.com/news/articles/...ushes-chinese-to-1-million-seattle-homes

[Metro-One]

"Why pay more for the same thing"

That line right there just gets to me.

Pretty much all that needs to be said about these buyers' intentions.

They don't care about Vancouver itself. They are not buying here because they were especially drawn to Vancouver's way of life, community, nature, etc... Just wanted somewhere to park their money.

If Vancouver, Seattle, and Toronto are all the same thing to you, then I am happy that they are buying somewhere else.

Maybe I am old fashioned, but when I am choosing to move to a new city or area there are more reasons to it than just cost. For me, someone who actually plans to live somewhere, they are not all the same thing.