DATE

Housing BC
Steve Saretsky -

Housing Epidemic Spreads Across BC This is hardly news, but yes the housing crisis indeed spread across the entire province. The epidemic that started in Vancouver went airborne and spread like a deadly virus into unsuspecting neighbourhoods. Including areas such as Chilliwack, Kamloops, The Okanagan, The Kootenays, and Vancouver Island just to name a few. Much like Vancouver, these areas appeared to be suffering similar symptoms as Metro Vancouver, a so called unprecedented “housing shortage”. But like I mentioned in a previous post, trying to remedy the epidemic with supply was treating the symptoms not the disease. Take a look at just how quickly inventory dried up in these unsuspecting areas. So are all these areas really facing a housing shortage? Unlike Vancouver these areas have always remained relatively stable and reflective of local incomes. Conventional wisdom suggests these homes should rise in line with inflation which hovered around 2% this year in British Columbia. That was not the case last year. [table id=28 /] Makes you question whether the supply myth was used to seduce unsuspecting buyers into the market… Get my best work sent to your inbox here.

Steve Saretsky -

What Does a Trump Presidency Really Mean for Canadian Real Estate? Despite all odds, The Donald is in. Let the fear mongering begin. A recent article from Money Sense titled US Interest in Canadian Real Estate Surges wasn’t about to waste any opportunities. The author, Romana King (a licensed Realtor) writes panicked Americans have upped their online search activity for Canadian real estate. For a further unbiased analysis, the article highlights a recent survey of local Realtors… “The most desirable location in this province, according to 62.5% of real estate advisors, is the Greater Toronto Area, while just over two-thirds (67.2%) pointed to the GTA as the region in which Americans purchased the most property over the same period of time. Looking ahead, 38.4% of survey respondents from Ontario expect U.S. inquiries into Canadian real estate to increase following today’s Trump inauguration. According to 32.1% of Royal LePage realtors, Victoria is the preferred location, while 25% of Royal LePage realtors cited Greater Vancouver as the top region of interest among American home-buyers considering a real estate purchase in B.C. Looking ahead to 2017, 43.6% of B.C. respondents anticipate American inquiries into Canadian real estate will increase after Donald Trump takes office.” If Americans

Steve Saretsky -

No Trickle Effect, Slumping Sales Dismissed As i’ve highlighted in every recent monthly report, sales are slumping. As of December, 2016 detached sales in Vancouver are down 50%, townhouses down 31% and condos down 25%. Now don’t get me wrong, 2016 was a record year, but even then, sales are still below 10 year averages. Recently, there seems to be some sort of denial around the slumping sales numbers. Look I don’t know where the market is going, neither does the next guy. However, some are choosing to downplay sales even though we all emphasized sales only a short year ago. The latest excuse is that slumping sales are due to low inventory levels. This seems logical since little inventory means fewer homes for buyers to choose their “dream home.” But how quickly forget we set record sales last year despite record low inventory. As an example, the peak of the market was in March 2016. Despite (at the time) record low inventories, we set a record number of sales. Just see the charts below. These charts show that despite record low inventory that didn’t stop sales from hitting record highs. To say sales are low due to low inventory

Steve Saretsky -

BC’s Strong Economy Responsible for Record Sales Just last week the BC Real Estate Association announced 2016 was a record setting year for home sales. Sales in the province were up 9.5% from 2015, a previous record. The incredible surge in sales had little to do with foreign capital and cheap credit. BCREA’s chief economist Cameron Muir explains the record year; “Broad-based consumer demand driven by strong economic conditions, employment growth, consumer confidence and an expanding population base pushed home sales to record levels in many B.C. regions last year.  Strong economic conditions? Household debt levels have never been higher. Canadians owe $1.67 in debt for every dollar of income they earn. As house prices soar, citizens are forced to over leverage to get into the housing market. As a result, household leverage has never been higher. As household leverage hits record highs, home ownership also reaches new highs in BC, hitting a whopping 70%. With home ownership hitting new highs so too does unaffordability. Price to household income in BC takes off. Employment growth? Employment growth has taken off. There’s just one problem, it’s the wrong kind of growth. All of the jobs created in 2016 were part time

Steve Saretsky -

Early 2017 Observations in the Vancouver Real Estate Market I must admit sometimes this blog is for purely selfish reasons. I’m fascinated by the Vancouver real estate market. I’ve said it before and i’ll say it again, regardless of what happens this will be a case study in the next few years. Just when you think you know what’s going to happen next some reckless level of government hits the panic button and changes everything you thought you knew. Anyways, wild governments aside, here’s the good, the bad, and the downright ugly in early 2017. Of course depending on your stance and hopes for the market you might find the good bad, and the bad good. The Good The market hasn’t gone to complete shreds. The entry level condo market is still chugging along. Whatever entry level is for your specific area. In Vancouver that’s the sub $600,000 market, in Richmond that’s the sub $400,000 market. These markets are still relatively “affordable” and thanks to Christy Clarks brilliant first time home buyers loan, it could keep pace. I was showing condos in Richmond this weekend in the $300,000 range, open houses were busy. Affordable Richmond condos are selling quick, some

Steve Saretsky -

Vancouver Homeowners Getting Squeezed With Metro Vancouver real estate prices soaring 40% over the past two years the effects are widespread. Adding to it, BC property tax assessments released earlier this month are now factoring in an average increase of 30-50% from last year alone. It appears locals are at a boiling point as the struggle to put a roof over your head reaches dire proportions. Take for example, Sarah Wilson, a retired school teacher who just got hit with a 55% increase in her Coquitlam home assessment. Now fearing further increases in her cost of living during her retirement years. But Sarah and her little Coquitlam home aren’t the only ones, property assessments have surged across the lower mainland. As home values explode across the lower mainland and wages stagnate, property tax deferrals have become increasingly common. Property tax deferrals are an option that allows homeowners to defer paying their property taxes as long as they pay the 0.7% interest rate if you’re 55 and older, or if you have children a 2.7% interest rate applies. To little surprise, property tax deferrals have increased five fold over the past 10 years. More than $137 million in property taxes are unpaid

Steve Saretsky -

Metro Vancouver Adding Record Supply of Housing Like any housing crisis in history, we attempt to build our way out of it. It’s never been done successfully. Nonetheless, amidst a 40% price increase over the past two years, Vancouver is undergoing a massive boom in housing that will go down in the record books. A boom that has kept the BC economy propelling forward. Residential construction now equates for 7% of Canada’s entire GDP. More than the United States in 2007. Now that 2016 has come to an end, the final numbers are out. BC and Metro Vancouver both set new records for housing starts (when a project begins construction) and for new homes registered (when the building completes). Let’s break down the BC numbers. The province of BC had a total of 41,843 new units started in 2016. That’s a staggering 46% more housing starts than the four year average of 28,580 units from 2012-2015. To add to this, new housing completions were also well above average. In 2016, new housing completions were 30% above the 5 year average. Multi family completions were thrown up at an eye popping 32% above the 5 year average. So what about Metro Vancouver? Metro

Steve Saretsky -

Condo Sales Fall in December, Prices Flatlining The Vancouver condo market followed a similar trend this month as seen in the November Condo Report.  Condo sales across Vancouver West fell 29% year over year, and prices appear to be flatlining, after a slight drop off from peak prices back in June/July. It also followed a seasonal trend that saw the average days on market continue to creep upwards. With that being said, condos are still selling well. I’ll break down all the numbers below. Sales [table id=27 /] Vancouver condo sales took a substantial step backwards compared to one year ago. Last year was certainly a record year, however, Vancouver condo sales for December were still 7% below the 10 year average. Average Days on Market Vancouver West- 34 Downtown- 39 Yaletown- 29 West End- 22 Kitsilano- 23 False Creek- 45 Vancouver condos are taking longer to sell. Some of this is seasonal, some accredited to a slowdown. The average days on market is still 17% lower than it was last year but up from quite a bit from it’s low of 17 days in August. Inventory Levels Months of inventory indicates how many months of inventory we currently have

Steve Saretsky -

Chinese Government Clamps Down on Capital Flight There seems to be an all out assault on restricting Chinese capital from flowing out of the country. In lieu of a sputtering Chinese economy citizens have been looking to get their money out of the Country by any means possible. Even if it means investing in a digital currency such as Bitcoin. The chart below shows Bitcoin hits a new three year high as the Chinese Yuan falls. So what does this mean for Vancouver real estate? It’s been highly publicized that house prices have inflated globally. Part of it due to the massive outflows of Chinese capital. Perhaps best documented in Vancouver real estate where prices were sent soaring over the last few years. Richmond, the highest concentration of foreign buyers (25%) saw house prices increase the most of any other city in the lower mainland.  Detached prices surged 80% over the past 3 years. Since the introduction of the foreign buyers tax the detached market in Richmond has been punished.  Just when the assault on foreign capital couldn’t get any tougher the Chinese Government implemented a chokehold on it’s citizens, restricting them from exporting money for the purpose of buying international

Steve Saretsky -

Attached Market Holds Steady With Few Sellers December was very similar to my November condo/townhouse market report. Sales fell again this month, however, new listings fell even faster. After enormous price gains this year sellers are hesitant to sell in lieu of recent equity gains. However, the stats don’t paint the whole picture. Despite record low inventory levels, and sales outpacing new listings there is no upward pressure on prices. In fact, prices for much of the attached market have actually come down a bit. This is contrary to the demand/supply theory that suggests more demand than supply should push prices up. Sales [table id=25 /] As per the chart, REBGV condo sales are down 25% year over year. FVREB (Fraser Valley) condo sales are up 4% year over year. You may wonder why the discrepancy between the two areas? The Fraser Valley took off about 4-5 months after Greater Vancouver and still remains affordable, a delay should be expected during a correction phase as well. New Listings Vancouver East- 50 Vancouver West- 148 Richmond- 93 Burnaby- 66 REBGV- 606 FVREB- 182 New condo listings for REBGV were down 35% year over year, FVREB was down 19%. It was the

Steve Saretsky -

Detached Sales Fall 24% Below 10 Year Average It was a blistering cold December in Vancouver, with heavy amounts of snowfall wrecking havoc amongst unsuspecting locals. But make no mistake, the weather had nothing to do with this month’s real estate freeze. It continued a trend that has been ongoing for the past 6 months, including November, which saw a 52% drop in sales year over year.  Sales across the lower mainland continued to falter, again falling 52% year over year this month and even more dramatic in certain areas. Sales [table id=24 /] As noted in the table above, detached sales fell year over year by 47% in Vancouver East, 52% in Vancouver West, 66% in Richmond, 59% in Burnaby, 52% in REBGV, 54% in FVREB (Fraser Valley). REBGV detached sales were 24% below the 10 year average, Fraser Valley fell 22% below the 10 year average. New Listings Vancouver East- 77 Vancouver West- 63 Richmond- 82 Burnaby- 47 REBGV- 486 FVREB- 331 As per usual, new listings were at their lowest in the month of December. This is typical as sellers hold off until the New Year. However, REBGV new listings were 28% below the 10 year average,

Steve Saretsky -

Since I started this blog your supportive messages have been astounding, such as this one from Ashley; “Hi Steve, keep up the good work you have done! You are the one that deserves my respect with your honest and fair assessment on Vancouver real estate market- something I have yet to see from other Realtors who I had dealt with.” Or this one from Michael: “Love your informative site and honesty. Quick question, are you literally the only honest Real Estate agent in the Lower Mainland? The above question is significant since it’s being asked by a lawyer that has seen a fair bit of his colleagues turn to the “dark side” over the last decade lured be easy profits…” But for every 10 supportive messages, I get one negative one. To be expected when you go against the grain. Something I’m more than okay with. I want to highlight this recent message so I can clarify a few things.  I’m not going to say this fine gentlemen’s full name, the point of this post is not to publicly humiliate him but rather elaborate on why I do what I do. Like most negative feedback that I receive, it’s usually

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The Canadian Economy

Steve Saretsky -

Housing Epidemic Spreads Across BC This is hardly news, but yes the housing crisis indeed spread across the entire province. The epidemic that started in Vancouver went airborne and spread like a deadly virus into unsuspecting neighbourhoods. Including areas such as Chilliwack, Kamloops, The Okanagan, The Kootenays, and Vancouver Island...

Steve Saretsky -

What Does a Trump Presidency Really Mean for Canadian Real Estate? Despite all odds, The Donald is in. Let the fear mongering begin. A recent article from Money Sense titled US Interest in Canadian Real Estate Surges wasn’t about to waste any opportunities. The author, Romana King (a licensed Realtor) writes panicked...

Steve Saretsky -

No Trickle Effect, Slumping Sales Dismissed As i’ve highlighted in every recent monthly report, sales are slumping. As of December, 2016 detached sales in Vancouver are down 50%, townhouses down 31% and condos down 25%. Now don’t get me wrong, 2016 was a record year, but even then, sales are...

Steve Saretsky -

BC’s Strong Economy Responsible for Record Sales Just last week the BC Real Estate Association announced 2016 was a record setting year for home sales. Sales in the province were up 9.5% from 2015, a previous record. The incredible surge in sales had little to do with foreign capital and...

Steve Saretsky -

Early 2017 Observations in the Vancouver Real Estate Market I must admit sometimes this blog is for purely selfish reasons. I’m fascinated by the Vancouver real estate market. I’ve said it before and i’ll say it again, regardless of what happens this will be a case study in the next...

Steve Saretsky -

Vancouver Homeowners Getting Squeezed With Metro Vancouver real estate prices soaring 40% over the past two years the effects are widespread. Adding to it, BC property tax assessments released earlier this month are now factoring in an average increase of 30-50% from last year alone. It appears locals are at...

Steve Saretsky -

Metro Vancouver Adding Record Supply of Housing Like any housing crisis in history, we attempt to build our way out of it. It’s never been done successfully. Nonetheless, amidst a 40% price increase over the past two years, Vancouver is undergoing a massive boom in housing that will go down...

Steve Saretsky -

Condo Sales Fall in December, Prices Flatlining The Vancouver condo market followed a similar trend this month as seen in the November Condo Report.  Condo sales across Vancouver West fell 29% year over year, and prices appear to be flatlining, after a slight drop off from peak prices back in...

Steve Saretsky -

Chinese Government Clamps Down on Capital Flight There seems to be an all out assault on restricting Chinese capital from flowing out of the country. In lieu of a sputtering Chinese economy citizens have been looking to get their money out of the Country by any means possible. Even if it...

Steve Saretsky -

Attached Market Holds Steady With Few Sellers December was very similar to my November condo/townhouse market report. Sales fell again this month, however, new listings fell even faster. After enormous price gains this year sellers are hesitant to sell in lieu of recent equity gains. However, the stats don’t paint...

Steve Saretsky -

Detached Sales Fall 24% Below 10 Year Average It was a blistering cold December in Vancouver, with heavy amounts of snowfall wrecking havoc amongst unsuspecting locals. But make no mistake, the weather had nothing to do with this month’s real estate freeze. It continued a trend that has been ongoing...

Steve Saretsky -

Since I started this blog your supportive messages have been astounding, such as this one from Ashley; “Hi Steve, keep up the good work you have done! You are the one that deserves my respect with your honest and fair assessment on Vancouver real estate market- something I have yet...

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The Saretsky Report. December 2022