DATE

NDP & Green Party
Steve Saretsky -

Both Parties Have Aggressive Proposals Towards Affordable Housing It looks like Christy Clark and the BC Liberals run has come to an end. Announced today the NDP & Green Party have teamed up to form a stable minority government over the next four years. This could mean big changes coming to the Vancouver real estate market and housing affordability across BC. Both parties had aggressive platforms targeting housing. The Green Party’s Housing Platform is as follows: A BC Green government will work with the federal government to introduce measures to eliminate money laundering and international property speculation from the BC residential real estate market. Enhance the progressive nature of the property transfer tax by introducing a sliding scale of rates from 0% on the first $200,000 for a property’s value, to 12% on property value over $3 Million. Apply the PTT to the transfer of beneficial ownership introduce a speculation tax to discourage flipping of property Expand the foreign buyers tax to apply across the province to 30% Introduce measures to tax lifetime capital gains in excess of $750,000 on principal residences on homes bought and sold within 5 years. Work with financial institutions and the federal government to develop

Steve Saretsky -

Bank of Canada Keeps Interest Rates Untouched Despite Growing Pessimism Despite echoing concerns regarding an overheated housing market and a mountain of debt, the Bank of Canada held interest rates firm today at 0.5%. This has sparked a slough of criticism, from a plethora of economists. Including, most recently Carlos Capistran, head of economics at Bank of America. “The way you reduce the pace of credit growth and eventually solve the problem of high leverage is by having higher rates, not by keeping rates low. It is painful for the economy when you start tightening but you have to do it at some point. Otherwise, leverage is going to keep increasing.” Painful, indeed. A recent survey from Manulife highlights almost three quarters of Canadian homeowners would have difficulty paying their mortgage every month if their payments increased by as little as 10%. Even more concerning, 14% of respondents said they couldn’t afford any increase in their mortgage payments. This comes at a time when household debt levels have never been higher, and interest rates have never been lower. A recipe for disaster, in which professor Steve Keen believes has set Canada up for a credit crisis before the year 2020. Which

Steve Saretsky -

Total Dollar Volume on Vancouver Real Estate Plunges Year Over Year The divergence between the condo and detached markets has never been more evident. With foreign capital drying up and stricter mortgage regulations in place, the ability of locals to pick up the tab on million dollar homes is dwindling. Despite the popular narrative that the detached market is heating up, recent data below shows it’s struggling to recoup last year’s success. Meanwhile, the condo market appears relatively untouched. I’ve highlighted the sales/actives ratio which tracks how many sales happen divided by new listings for each month. This is a key metric to follow as it’s a true measure of demand. Below I’ve overlaid the sales/actives ratio with the total dollar volume (how much is spent on Vancouver real estate). Detached Market Buyers of Vancouver detached homes spent 49% less this April than they did in April, 2016. That’s nearly $611 million dollars less. That’s a big chunk of change considering about 20% of BC’s economy is dependant on real estate. Further, as you can see, there’s a pretty close correlation to the total dollar volume and the sales/actives ratio (demand). As demand falls, so too does the dollar volume.

Steve Saretsky -

Vancouver Homeowners Adding More Leverage A recent report from the good folks over at Better Dwelling titled Vancouver Mortgages are Rapidly Deteriorating in Quality highlights growing concerns of subprime, and over leveraged homeowners. High-ratio mortgages with low income levels continues to grow. With home prices surging, Vancouverites are leveraging up. High ratio mortgages with loan to incomes greater than 450% are up 25% over the past two years. Risky mortgage debt now sits at 39% in Vancouver. Fuelling the Fire It’s no wonder CMHC’s Evan Siddall was so vocal against the BC Government’s HOME Partnership program, which entices high risk first time buyers with interest free, and payment free loans for the first 5 years.  In a recent report from The Tyee Siddall ripped the ill advised program. “You will know we are holding our noses firmly on this and I would not want any other [provinces and territories] to be misled into thinking this ill-advised program represents good public policy. Siddall believes the B.C. government’s claim that the program would make home ownership more affordable for thousands of British Columbians was wrong. “I am joined by a loud chorus of economists in insisting that it will do the exact opposite.”

Mohit Chawla -

The Affordability Crisis that Started in Vancouver Has Now Enveloped Toronto- Guest Post by Josh Gordon Josh Gordon is Assistant Professor in the School of Public Policy at Simon Fraser University in Vancouver. He has written extensively on housing price issues, including “Lunacy in Lotusland: Vancouver’s Housing Affordability Crisis” in the Summer/Fall 2016 issue of Inroads. Here’s his latest post House Price Lunacy Moves East.  What started in Vancouver, Canada’s scenic outpost in the west, has now enveloped Toronto. Housing affordability crises of historic proportions now plague both cities. The warning signs were all there, even for casual observers. To their credit, certain mainstream media outlets saw this unfolding, and posted sentries to report back to central Canada – Kathy Tomlinson of the Globe and Mail comes to mind. But political leaders in the heart of Canada remained either unaware or craven and timid in their reaction. Worse, some political authorities from the “centre” tried to silence the obvious alarm bells ringing in Vancouver – insinuating in various ways that West Coasters were just a bunch of xenophobes or racists.1 But the concerns of Vancouverites were not a figment of their imagination. They were all too real. A wave of capital from

Steve Saretsky -

Condo Prices and Multiple Offers Surge in the Suburbs As the last bit of locals get squeezed out of the detached market the herd has reversed course, piling into the condo market. Supply zombies continue to claim a shortage of land and population increases as the driver behind historical price increases in Vancouver. But what about the Fraser Valley where there’s a plethora of land and thousands of new condo developments ready to be built at the drop of a hat? Ironically, Fraser Valley condo prices have exploded more than any other area. Condos in Langley, Abbotsford and Surrey have increased by 25% or more year over year. As per the MLS benchmark, condo prices in Langley have soared 33% year over year. In April 48% of condos sold over asking price, indicating house lust has reached epic proportions. The irrational exuberance is even more glaring in Abbotsford where 36% of April condo sales went over asking price, and the benchmark price officially hit head scratching heights, increasing by 39% in one year. And finally, Surrey condos, which have now gone vertical, up 27% year over year. Yes, a condo in Newton has officially become the best thing since sliced

Steve Saretsky -

New Listings Beginning to Normalize In First Few Weeks of May Early numbers are starting to suggest the listing purge could be nearing an end. Over the last few months new listings have been abnormally low, helping reignite multiple offers across various market segments and areas. New listings have been trending 20-30% below last years levels as sellers patiently sit on the sidelines. However, in the first couple weeks of May, sellers are emerging once again. While it’s still early, it’s an encouraging sign for a market that’s in desperate need of inventory. REBGV Detached Detached sales have been trending well below normal levels. Despite gathering some momentum in recent months they are still dwindling behind last years totals. Through the first 15 days of May, sales are down 17% year over year. With that being said, the current 747 sales are not far off the 10 year average. Meanwhile, new Listings are virtually identical to last year for this time period. A nice turnaround after a pathetic start to 2017. Time will tell if this recent uptick is sustainable. For the first 15 days of May new listings are just 4% below the 10 year average. Not bad. REBGV

Steve Saretsky -

Tightening Inventory Keeps Condo Market Competitive This is a follow up to the Vancouver Condo Report April 2017 which outlined much of what you need to know about the current market. However, I’m always looking to provide more value, and more in depth analysis for you. In this post i’ll cover the average days on market, the sales/actives ratio, and the percentage of multiple offers. Here’s what we know so far, Vancouver condo sales fell by 21% year over year, new listings plopped by 24%, while prices continued to trend upwards. Days On Market The median days on market for Vancouver West condos was 9 days in April. That’s down from the 10 days in March. This is historically very low and highlights just how favourable it is for sellers right now. The typical procedure of hosting weekend open houses followed by offer dates is alive and well. See the chart below for a breakdown of each area. Sales/Actives Ratio As I always like to explain, the sales/actives ratio is a key indicator of the temperature of a market. It’s basically how many sales are happening in a given month divided by new listings. Anything above 20% is considered a

Steve Saretsky -

12 Month Rolling Average Highlights Massive Plunge in New Listings Many are still trying to make sense of the detached market. If you read the Vancouver Real Estate Detached Market Report April 2017 then you’re well aware this segment of the market has regained some traction. The sales/actives ratio, which is a key indicator of demand vs supply, is climbing upwards and prices appear to be inching higher. So the question becomes, what is causing this sudden resurgence? A recent report from Josh Gordon, professor of public policy at SFU, noticed some intriguing data over the past several months. As we know, sales have been anemic ever since the foreign buyers tax. Sales have been dropping by nearly 50% year over year. The most recent data from a 12 month rolling average highlights the steep decline. As sales dried up, inventory started to recover from it’s unhealthy lows. Inventory slowly began inching upwards, and stability started to return to the detached market. A once hot detached market turned cold. Houses were taking longer to sell and it appeared listings would continue to pile up. Then, unexpectedly, the detached market was thrown a life line. New listings plunged, sellers refused to sell. It

Steve Saretsky -

Richmond Politicians Have Turned a Blind Eye & Failed To Act Amidst Housing Crisis For regular readers of this blog you’ll know i’ve penned multiple posts on Richmond’s erroneous real estate market. Having grown up in Richmond it’s been eye opening to see how much the city has changed over the past few years, and not for the good. Politicians and Richmond Mayor Malcolm Brodie have completely turned a blind eye to a flood of foreign capital displacing locals which has created a false economy completely dependant on real estate. Just last week a report from Site Economics shows taxpayers in Metro Vancouver’s traditionally “upper and middle class” western urban centres, such as Vancouver, Richmond and Burnaby, are reporting unusually low taxable median family incomes, well below the regional average. The city of Richmond had the lowest reported taxable income in Metro Vancouver yet some of the highest house prices. The benchmark price of a detached home in Richmond has surged by nearly 80% over the past three years and now sits at $1,589,000. The housing affordability ratio created by these very low incomes and very high housing prices makes it clear that not all income is being reported for

Steve Saretsky -

Vancouver Condo Prices Set New Highs in April Similar to last month (Vancouver Condo Report March 2017) the market continues it’s torrid pace. New listings and inventory are scarce as would be sellers hold put. This is suppressing inventory and keeping upwards pressure on prices. Yep, just when you think Vancouver condos couldn’t get any pricer they find another leg up. Let’s break down the sales, inventory, and prices by area. Vancouver Condo Sales Vancouver condo sales fell by 21% year over year. Of course this drop is coming off a record year. Vancouver condo sales are still are right on par with their 10 year average for the month of April. There are definitely fewer buyers this year but with inventory being so low it hasn’t made any difference on prices. Here’s how sales look for the month of April over the past 10 years. New Listings/Inventory Levels New listings continue to trend well below normal levels. Vancouver condo new listings fell by 24% year over year and 34% below the 10 year average. Amidst a housing crisis many sellers are choosing not to sell in fear that they will be stuck in a vicious bidding war when trying

Steve Saretsky -

Low Inventory Continues to Keep Upwards Pressure on Prices If you read last months report (Vancouver Real Estate Condo & Townhouse Report March 2017) you would have recognized the upwards trend on prices. Yes, prices are back on the upswing amidst historically low inventory levels. So although the overall number of buyers has dwindled from one year ago, prices refuse to budge thanks to a decline in new listings. In this monthly report i’ll breakdown sales, inventory, and prices by area. Condo Sales REBGV condo sales dropped off by 18% year over year for the month of April. Despite the drop year over year, sales were still 26% above the 10 year average. The big story here is that despite sales falling, prices are going up because inventory has become even more scarce. As you’ll see in the chart below, sales have dropped in every area but are still well above normal levels. Condo New Listings/ Inventory The big story remains the drop off in new listings. Condo sellers are holding firm amidst a housing crisis. There’s almost a sense that one needs to hunker down and hold onto their home. If you sell you’ll have to compete to buy

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The Canadian Economy

Steve Saretsky -

Both Parties Have Aggressive Proposals Towards Affordable Housing It looks like Christy Clark and the BC Liberals run has come to an end. Announced today the NDP & Green Party have teamed up to form a stable minority government over the next four years. This could mean big changes coming...

Steve Saretsky -

Bank of Canada Keeps Interest Rates Untouched Despite Growing Pessimism Despite echoing concerns regarding an overheated housing market and a mountain of debt, the Bank of Canada held interest rates firm today at 0.5%. This has sparked a slough of criticism, from a plethora of economists. Including, most recently Carlos Capistran,...

Steve Saretsky -

Total Dollar Volume on Vancouver Real Estate Plunges Year Over Year The divergence between the condo and detached markets has never been more evident. With foreign capital drying up and stricter mortgage regulations in place, the ability of locals to pick up the tab on million dollar homes is dwindling....

Steve Saretsky -

Vancouver Homeowners Adding More Leverage A recent report from the good folks over at Better Dwelling titled Vancouver Mortgages are Rapidly Deteriorating in Quality highlights growing concerns of subprime, and over leveraged homeowners. High-ratio mortgages with low income levels continues to grow. With home prices surging, Vancouverites are leveraging up....

Mohit Chawla -

The Affordability Crisis that Started in Vancouver Has Now Enveloped Toronto- Guest Post by Josh Gordon Josh Gordon is Assistant Professor in the School of Public Policy at Simon Fraser University in Vancouver. He has written extensively on housing price issues, including “Lunacy in Lotusland: Vancouver’s Housing Affordability Crisis” in...

Steve Saretsky -

Condo Prices and Multiple Offers Surge in the Suburbs As the last bit of locals get squeezed out of the detached market the herd has reversed course, piling into the condo market. Supply zombies continue to claim a shortage of land and population increases as the driver behind historical price...

Steve Saretsky -

New Listings Beginning to Normalize In First Few Weeks of May Early numbers are starting to suggest the listing purge could be nearing an end. Over the last few months new listings have been abnormally low, helping reignite multiple offers across various market segments and areas. New listings have been...

Steve Saretsky -

Tightening Inventory Keeps Condo Market Competitive This is a follow up to the Vancouver Condo Report April 2017 which outlined much of what you need to know about the current market. However, I’m always looking to provide more value, and more in depth analysis for you. In this post i’ll...

Steve Saretsky -

12 Month Rolling Average Highlights Massive Plunge in New Listings Many are still trying to make sense of the detached market. If you read the Vancouver Real Estate Detached Market Report April 2017 then you’re well aware this segment of the market has regained some traction. The sales/actives ratio, which is a...

Steve Saretsky -

Richmond Politicians Have Turned a Blind Eye & Failed To Act Amidst Housing Crisis For regular readers of this blog you’ll know i’ve penned multiple posts on Richmond’s erroneous real estate market. Having grown up in Richmond it’s been eye opening to see how much the city has changed over...

Steve Saretsky -

Vancouver Condo Prices Set New Highs in April Similar to last month (Vancouver Condo Report March 2017) the market continues it’s torrid pace. New listings and inventory are scarce as would be sellers hold put. This is suppressing inventory and keeping upwards pressure on prices. Yep, just when you think...

Steve Saretsky -

Low Inventory Continues to Keep Upwards Pressure on Prices If you read last months report (Vancouver Real Estate Condo & Townhouse Report March 2017) you would have recognized the upwards trend on prices. Yes, prices are back on the upswing amidst historically low inventory levels. So although the overall number...

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The Saretsky Report. December 2022