The Metro Vancouver Real Estate Thread

[whatnext]

Hang on to your hat, 🞵🞵🞵🞵's about to get real. And this is just the sanitized real-estate-dependent media reporting:

The Metro Vancouver pre-sale condo market, which had been seeing double-digit-percentage price gains of between 30 to 60 per cent, with each new project seemingly selling out and setting ever higher prices, is showing signs of slowing.

It’s a part of the real estate market that is unique because the sales aren’t immediately subject to the foreign-buyer’s tax implemented in July 2016. Also, sales and prices for pre-sale condos aren’t recorded in MLS figures, or monthly reports produced by real estate boards, until the units are constructed and the deals are finalized in land-title records, which can take a few years...

...Projects that took these factors into consideration and adjusted prices managed to still sell well, said Ferreira, but those that neglected them “experienced much lower buyer-urgency levels and slower absorptions,” meaning instead of selling 70 to 80 per cent of units in a project within a few weeks, it might take “more incentives to get 40 to 50 per cent in a few months,” and then longer for the rest to sell...

https://vancouversun.com/business/real-e...t-sees-slowdown-and-flattening-of-prices

[rofina]

Originally Posted by whatnext

Hang on to your hat, 🞵🞵🞵🞵's about to get real. And this is just the sanitized real-estate-dependent media reporting:

The Metro Vancouver pre-sale condo market, which had been seeing double-digit-percentage price gains of between 30 to 60 per cent, with each new project seemingly selling out and setting ever higher prices, is showing signs of slowing.

It’s a part of the real estate market that is unique because the sales aren’t immediately subject to the foreign-buyer’s tax implemented in July 2016. Also, sales and prices for pre-sale condos aren’t recorded in MLS figures, or monthly reports produced by real estate boards, until the units are constructed and the deals are finalized in land-title records, which can take a few years...

...Projects that took these factors into consideration and adjusted prices managed to still sell well, said Ferreira, but those that neglected them “experienced much lower buyer-urgency levels and slower absorptions,” meaning instead of selling 70 to 80 per cent of units in a project within a few weeks, it might take “more incentives to get 40 to 50 per cent in a few months,” and then longer for the rest to sell...

https://vancouversun.com/business/real-e...t-sees-slowdown-and-flattening-of-prices

This is kind of just a return to the average though.

3-4 years ago towers were taking month to sell.

I feel like the market got used to double digit condo increases over the last 24-36 months, where in fact condos have been the laggards over much of the last decade.

[whatnext]

Condo prices see third month of sliding prices. 🞵🞵🞵🞵 to be holding a pre-sale.

With a stagnant and declining detached house market, it was only a matter of time until panic buying began to fall out of favour and the slowdown spread into the condo market. Vancouver condo sales dropped 30% year-over-year in August, ticking in at a six year low for the month. With August 2008 and August 2012 just barely surpassing this year as the slowest on record.

With condo sales cooling off, inventory has begun to increase. The number of Vancouver condos for sale increased by a whopping 51% year over year. Despite the increase, inventory levels remain below historic norms, however, the quick jump in inventory combined with falling sales is a concerning trend. Expect condo inventory to swell in the coming months and even years ahead, as a record number of new construction apartments near completion. There are currently a record high 43,024 units under construction and a plethora of housing starts also underway. In other words, there’s a pipeline of supply coming and the demand might not be there to meet it...

http://vancitycondoguide.com/vancouver-condo-prices-dip-in-august/

[misher]

Originally Posted by whatnext

Condo prices see third month of sliding prices. 🞵🞵🞵🞵 to be holding a pre-sale.

With a stagnant and declining detached house market, it was only a matter of time until panic buying began to fall out of favour and the slowdown spread into the condo market. Vancouver condo sales dropped 30% year-over-year in August, ticking in at a six year low for the month. With August 2008 and August 2012 just barely surpassing this year as the slowest on record.

With condo sales cooling off, inventory has begun to increase. The number of Vancouver condos for sale increased by a whopping 51% year over year. Despite the increase, inventory levels remain below historic norms, however, the quick jump in inventory combined with falling sales is a concerning trend. Expect condo inventory to swell in the coming months and even years ahead, as a record number of new construction apartments near completion. There are currently a record high 43,024 units under construction and a plethora of housing starts also underway. In other words, there’s a pipeline of supply coming and the demand might not be there to meet it...

http://vancitycondoguide.com/vancouver-condo-prices-dip-in-august/

I've seen articles talking about the lower market condo prices going way up as luxury buyers slide down and demand for them increases.

Luxury real estate is definitely down though.

People aren't leaving Vancouver and more people are coming in than the amount of new construction so prices shouldn't decrease much if at all on the low end stuff. We have no vacancy here and people have to live somewhere, the lack of supply artificially keeps prices high as there is no cheaper housing in Vancouver besides rentals.
If the taxes cause new construction to cancel we may see rapidly rising prices in the far future, who knows. A large chunk of the budget comes from fees charged on strata condo development so I'm not sure how the decrease in strata construction will affect city budgets long term.

[WarrenC12]

Originally Posted by misher

People aren't leaving Vancouver and more people are coming in than the amount of new construction so prices shouldn't decrease much if at all on the low end stuff. We have no vacancy here and people have to live somewhere, the lack of supply artificially keeps prices high as there is no cheaper housing in Vancouver besides rentals.
If the taxes cause new construction to cancel we may see rapidly rising prices in the far future, who knows. A large chunk of the budget comes from fees charged on strata condo development so I'm not sure how the decrease in strata construction will affect city budgets long term.

Migration continues, but prices drift down. It's almost as if housing prices were not being driven by local demand. Huh.

[misher]

Originally Posted by WarrenC12

Migration continues, but prices drift down. It's almost as if housing prices were not being driven by local demand. Huh.

If you check the articles prices are down on luxury but for the lower end it’s up.

[GenWhy?]

What is a "low market condo" price? What is "way up"?

[misher]

Originally Posted by GenWhy?

What is a "low market condo" price? What is "way up"?

There’s no set like but off the top of my head condos under 1 million can be low market and 1-2 is middle. Then 2 mil+ is high.

This article is a decent read to provide facts https://www.straight.com/news/1134541/co...hats-summers-real-estate-story-vancouver

Anyway it kind of proves that taxes on rich people makes life worse for poor people. Not that I expect any taxes to be taken back. So enjoy cheaper mansions!

In every area on the East Side, condo benchmark prices went up in August over the same month in 2017. Increases ranged from 3.5 percent in Mount Pleasant to 19.9 percent in Killarney. Two other East Side neighbourhood with significant condo price increases were Fraserview (18.8 percent) and Champlain Heights (16.8 percent).

The benchmark price for condos also increased in every West Side neighbourhood on an annual basis, ranging from 4.2 percent in Oakridge to 12.4 percent in Marpole. The western section of Mount Pleasant was up by 2.1 percent, the West End was up 2.5 percent, and Coal Harbour rose by a staggering 17.4 percent.

Basically all the real estate taxes made housing much less affordable. We honestly wanted them to punish the rich but instead were heavily hitting affordability for the poor. I don’t blame them much for this as I myself didn’t predict it either. I do wish they’d admit they made a mistake and take them back. Instead I bet there going to look for a scapegoat and ignore/hide the statistics.

[retro_orange]

Originally Posted by misher

Anyway it kind of proves that taxes on rich people makes life worse for poor people. Not that I expect any taxes to be taken back. So enjoy cheaper mansions!

...

[Changing City]

Whether property prices - including condo prices - are rising, or falling, depends on the timeframe that's being looked at.

Year on year, condo prices are still higher in August 2018 than they were in August 2017, as misher's linked article states. More recently however, condo prices have been falling. This site has a lot of details, and a helpful chart that shows that prices for condos in the REBGV area (so everything except the Fraser Valley/Surrey) have actually dropped for three consecutive months.



source: Steve Saretsky: MLS HPI for condos

[whatnext]

Talk about polishing a turd. Note to our realtors here (declared and otherwise ), you'd be better served by have the real estate board's be unabashedly honest about how bad sales are to encourage sellers to price realistically:

[B][B]A sluggish sales market in British Columbia is dragging down Canadian real estate numbers.

The Canadian Real Estate Association says home sales rose by 0.9 per cent between July and August, marking the fourth consecutive monthly increase.

The growth came as roughly half of all local markets saw a month-over-month increase, led by the Greater Toronto Area, along with gains in Montreal and Edmonton.

Compared with a year ago, sales were down 3.8 per cent, a move CREA attributed mostly to declines in British Columbia.

The British Columbia Real Estate Association says there were 6,743 residential unit sales across the province in August, a 26.4 per cent decrease from the same month last year. The average B.C. home price was also down 1.2 per cent to $699,776.

The downturn in housing demand induced by the mortgage stress-test is now largely behind us,” said Cameron Muir, BCREA chief economist. “The B.C. housing market is evolving along the same path blazed by Ontario and Alberta, where the initial shock of the mortgage stress-test is already dissipating, leading to increasing home sales.”

For the year, B.C. home sales are down 21.3 per cent, but the average Multiple Listing Service sales price is up 1.7 per cent to $719,064...(turd polishing extraordinaire bolded)

https://vancouversun.com/business/real-e...own-26-per-cent-year-over-year-in-august

[misher]

Originally Posted by whatnext

Talk about polishing a turd. Note to our realtors here (declared and otherwise ), you'd be better served by have the real estate board's be unabashedly honest about how bad sales are to encourage sellers to price realistically:

Realistic prices are what people are willing to accept for their place and what people are willing to pay. If prices are insanely high, why isn't everyone selling?

People are dreaming if they think our real estate will go down to what it was 10 years ago. Look at the below comparison of prices across Canada, Vancouver is the best city to live because of our weather, nature, views, etc. and our prices are not going to fall lower than other Canadian cities. If you look at Seattle and other major cities in the world as a comparison below, our prices are normal. This is just what it costs to buy a house in a major city. And if you can't afford it, you have to rent or move. Don't tell people who own houses here to sell for less so you can get it cheap at their expense.

If you want to blame something for high housing prices, blame the weak Canadian dollar and the governments restrictions on density/supply.

We're a major city and we're an awesome place to live. We shouldn't be letting newcomers to Vancouver attack those who grew up here over their housing telling the government that they should force them to sell for less when they've owned the same house for 20+ years.

[whatnext]

Originally Posted by misher

Realistic prices are what people are willing to accept for their place and what people are willing to pay. If prices are insanely high, why isn't everyone selling?

People are dreaming if they think our real estate will go down to what it was 10 years ago. Look at the below comparison of prices across Canada, Vancouver is the best city to live because of our weather, nature, views, etc. and our prices are not going to fall lower than other Canadian cities. If you look at Seattle and other major cities in the world as a comparison below, our prices are normal. This is just what it costs to buy a house in a major city. And if you can't afford it, you have to rent or move. Don't tell people who own houses here to sell for less so you can get it cheap at their expense.

If you want to blame something for high housing prices, blame the weak Canadian dollar and the governments restrictions on density/supply.

We're a major city and we're an awesome place to live. We shouldn't be letting newcomers to Vancouver attack those who grew up here over their housing telling the government that they should force them to sell for less when they've owned the same house for 20+ years.

That graph you posted is over two years old. Vancouver in USD is now $672k just below the two tech powehouses of San Jose and San Francisco.

And newsflash it's those "newcomers" you refer to who are driving up prices, they're not telling your granny to sell her house for less than 2016, he market is.

[misher]

Originally Posted by whatnext

That graph you posted is over two years old. Vancouver in USD is now $672k just below the two tech powehouses of San Jose and San Francisco.

And newsflash it's those "newcomers" you refer to who are driving up prices, they're not telling your granny to sell her house for less than 2016, he market is.

Hah best graphs I could find within 10 secs of googling. But anyway it’s not like Vancouver is unique on the world scale. Plus we have a ton of alternatives like surrey Abbotsford etc

[WarrenC12]

Originally Posted by misher

Hah best graphs I could find within 10 secs of googling. But anyway it’s not like Vancouver is unique on the world scale. Plus we have a ton of alternatives like surrey Abbotsford etc

You're about 10 years late on this debate. Party's over man.

[whatnext]

Fires at multimillion-dollar homes draw suspicion and debate in Vancouver

A series of house fires in the last 11 months have sparked a debate about the effects of property speculation in Vancouver, including a call from one political party to ban Airbnb altogether.

Public suspicion, seen on social media and elsewhere, is focused on five properties that each embody some element of Vancouver’s housing crisis. The fires happened in multimillion-dollar houses that were either under development; were sitting empty; were being rented on the short-term rental site Airbnb; or had multiple, high-interest mortgages from unconventional lenders....

https://www.thestar.com/vancouver/2018/0...w-suspicion-and-debate-in-vancouver.html

Hmm, I wonder what else these properties might have had in common...

[retro_orange]

U.S. central bank chief issues warning on Canadian housing without even realizing it: Don Pittis

The world's most powerful central banker has confirmed that U.S. interest rates are on the way up — and if history is any guide, Canadian rates are going up with them.

Federal Reserve Chair Jerome Powell was optimistic about U.S. jobs, growth and the benign effect of current trade disputes, but one of his comments could be read as an unintentional but ominous warning about the Canadian housing market.

Powell's warning

The unexpected warning for Canadian housing came in what was intended as a reassuring response to a question about the danger of a U.S. asset bubble.
"If you look at asset prices, it is true that assets are at the upper reach of their historical ranges," Powell said.

He's confident that relatively well-off shareholders could deal with any drop in stock prices. And U.S. consumers in general are relatively safe because their most dangerous asset, housing, was part of a bubble that popped more than a decade ago.

U.S. housing, he said, remains more affordable than before the financial crisis in 2007.

But in his reassuring words for U.S. consumers, he dropped a grim warning for Canadians whose house prices have continued to rise sharply since the financial crisis.

"Really, what hurts is if consumers are borrowing heavily and doing so ... against an asset that can fall in value," he said. "That's a really serious matter, when you have a housing bubble and highly leveraged consumers and housing values fall.

"We know that's a really bad situation."

https://www.cbc.ca/news/business/fed-interest-rates-1.4839094

[Sheba]

These are the world's biggest property bubbles as ranked by UBS

Housing prices in Hong Kong are the most overvalued and at the greatest risk of collapse, according to a report focused on 20 major cities.

UBS Group's Global Real Estate Bubble Index puts Munich, Toronto, Vancouver, London and Amsterdam alongside Hong Kong as cities currently in property bubble territory.

"Major imbalances" are also found in Stockholm, Paris, San Francisco, Frankfurt and Sydney, the report said.

Los Angeles, Zurich, Tokyo, Geneva and New York are merely deemed overvalued, while Chicago is the only city included in the list that is viewed as undervalued.

The UBS researchers found a widespread breadth of the rise in property prices in major cities with prices increasing 35 percent on average over the last five years.

They identified price bubbles as regularly recurring phenomenon in property, defining them as "a substantial and sustained mispricing of an asset." The report said typical signs include a decoupling of prices from local incomes and rents, as well as excessive construction or bank lending.

...

Both Toronto and Vancouver are considered by UBS to be in bubble territory. The bank noted that higher stamp duties on foreign buyers have done little to curb the boom in prices in Vancouver but do look to have checked real estate appetite in Toronto.

...

[CanSpice]

Originally Posted by Sheba

These are the world's biggest property bubbles as ranked by UBS

The bank noted that higher stamp duties on foreign buyers have done little to curb the boom in prices in Vancouver...

[retro_orange]

Toronto, Vancouver among biggest property bubbles in the world, UBS says

9 years salary to buy a house in Vancouver, more than 6 in Toronto

Pete Evans · CBC News · Posted: Sep 28, 2018 10:43 AM ET | Last Updated: 8 hours ago

Housing booms in Toronto and Vancouver have placed both cities on a UBS ranking of the world's biggest housing bubbles. (Mark Blinch/Reuters)

Swiss investment bank UBS has deemed Toronto and Vancouver to have among the world's biggest housing bubbles, with mispricing that's even more pronounced than it is in expensive cities like Paris and San Francisco.

In an annual report published Thursday, the Swiss bank looked at 20 cities around the world that are considered to be financial centres, local metropolises that are hubs for their regional economies. The list includes familiar names such as Tokyo, New York, Sydney, Singapore and others, and for the most part, all the cities on the list share one thing in common — the cost of living is higher there than it is in other nearby places.

Some cities were worse for renters and others presented particular challenges for foreigners. In terms of overall housing prices being far more than they should be based on fundamentals, the bank singled out six cities for having worse housing bubbles than anywhere else:

• Hong Kong.
• Munich.
• Toronto.
• Vancouver.
• London.
• Amsterdam.

Using data about local salaries, housing prices, rental markets, mortgage debt and other metrics, the bank looked at 20 of the biggest housing markets and gave each city a score. A score below –1.5 is considered to be a depressed market, while a score in a range of between –1.5 to –0.5 is considered undervalued. Fairly valued to UBS is between –0.5 and 0.5, while overvalued is up to 1.5. Anything above 1.5 is considered to be a bubble, which the bank defines as " a substantial and sustained mispricing of an asset, the existence of which cannot be proved unless it bursts."

Vancouver scored a 1.92. Toronto was even higher, at 1.95.

That's not as bad as Hong Kong, which topped the list with a score of 2.03. But both Canadian cities are solidly in the range where the bank considers them to be among the most overvalued housing markets in the world.

Over the past five years, UBS says housing markets in the world's biggest cities have gone up on average by about 35 per cent. Vancouver has gone up by twice that. Toronto is up by 50 per cent.

• Analysis
  Don't expect government meddling in the housing market to fix it: Don Pittis

The bank says a new foreign buyers tax implemented in 2017 "proved futile in braking its boom" in Vancouver as after a brief pause, the city's housing market has continued to rise. By the bank's calculations, the sale price for a 675-square-foot apartment near downtown would cost a highly skilled service worker nine years in salary to afford.

And even that assumption is based on the impossible premise that they could spend 100 per cent of their income on their home.



Not all the cities UBS analyzed were deemed to have overpriced housing. (Scott Galley/CBC)


A recent slowdown in Toronto has made the city marginally more affordable for affluent people. But a 675-square-foot apartment in downtown Toronto would cost a highly skilled service worker more than six years in salary to afford.

"Price dynamics have slowed considerably and its index score declined somewhat from last year's," the bank said.

The bank also said "rising rates, stricter market regulations or an economic downturn could turn the lights out on the party given the high valuations and strained affordability."

High prices for housing have trickled down into the rental market, too, but even then there's ominous clouds on the horizon.

Based on the bank's calculations, anyone buying housing in Toronto as an investment property would have to rent it out for 25 years to break even, based on current rates. In Vancouver, it would take even longer — up to 34 years.

"Investors anticipate being compensated with capital gains for overly low rental yields," UBS said. "If such hopes do not materialize and expectations deteriorate, homeowners in markets with high price-to-rent multiples are likely to suffer significant capital losses."

https://www.cbc.ca/news/business/toronto-vancouver-housing-bubble-1.4842272