BC Real Estate Market Slows, Dollar Volume Falls 19% Year to Date It was the Vancouver Real Estate market that initially got the party started. As prices began to climb, the contagion spread across the province. Prices across BC ignited, house lunacy resulted in multiple offers in Prince George, and double digit price gains in Chilliwack. However, Recent data released by the BC Real Estate Association suggests the province could finally be cooling. The total dollar volume, which tracks the overall dollars spent on BC Real Estate fell 19% year to date. BC homebuyers have spent a whopping $10.9 Billion less this year. Most of the declines came from Greater Vancouver, which suffered a 26.3% decline, followed by the Fraser Valley & Victoria. Sales & Prices Total unit sales fell 17% across the province year to date but remain above the ten year average. The average sales price year to date dropped 2.8% for BC. The biggest decline was felt in Greater Vancouver, where luxury home sales have ground to a halt.  However, with that being said the year over year price movement haven’t changed much. Comparing July 2016 to July 2017, the average sales price is still up 5% for BC.

Number of Vancouver Condo Sales Sold Over Asking Price Dips to 49% In July You know it’s a crazy market when you have to call 49% of Vancouver condos selling over asking price a slow down. While it’s probably not the number local buyers were hoping for, any slowdown is welcoming news. In July, the percentage of Vancouver West condos which sold over asking price dropped from 53.9% in June to 48.6% in July. Sales to Actives Ratio Also Falls In July The sales to actives ratio which is key indicator when determining market conditions also slid downwards in July. The ratio fell from 68% to 43% for Vancouver West. This is part of a seasonal down trend which is expected this time of year, however, it’s also a decline of 7% year over year. Days on Market Remains Virtually Unchanged Despite the minor slowdown, the days on market remains virtually unchanged. The median days on market for Vancouver West condos is 9 days, which is the exact same as it was a year ago. Overall it’s a welcoming cool down, if you can even call it that. It sure beats a sales to actives ratio of over 200% for

Vancouver Homeowners Tapping Into Equity at Alarming Rates With Vancouver real estate prices surging over the past few years homeowners are tapping into their equity (refinancing) at alarming rates. It’s important to understand refinancing and how CMHC quantifies refinancing. “The consumer had a mortgage previously, opened a new mortgage in the current year, the address did not change, and the total mortgage balance increased by more than 10%.” The big takeaway in this scenario is that homeowner mortgage balance had to increase by more than 10% to quantify as a refinance. As per the latest data from CMHC, Vancouver homeowner refinancing (drawing equity) increased 27% year over year. Perhaps even more alarming is the massive growth in consumer refinancing for Abbotsford/Mission. Home prices have surged in these generally lower income areas and with that homeowners are tapping into recently discovered wealth. This is what economists call ‘the wealth effect’. As home prices increase, homeowners feel wealthier, so they tend to borrow and spend more. This was the case in the United States during their housing boom, as researched in the Book ‘House of Debt‘ . From 2002-2006 low credit-score homeowners borrowed an average of $0.40 for every $1 increase in

Luxury Home Sales In Vancouver Slump Amidst Tightening In China China has been on an aggressive effort to curb capital outflows. As of July 1, Chinese officials took it a step further limiting foreign currency transactions to a paltry $9,000. According to one of the foremost experts on the Chinese economy, Anne Stevenson-Yang, of J. Capital Research Ltd., says the new controls are aimed at stopping “ants moving house.”  A Chinese term for getting a lot of people to make small money transfers to ultimately transfer enough to buy property. But people find ways around the rules, she says. The wealthy often already have their money offshore, so they are not affected by new controls. Regardless, foreign exchange reserves have increased every month since January. And while the impacts on global real estate might be up for debate, the slowdown is already rearing it’s ugly head in Vancouver’s luxury market. Single family home sales above $3 Million have plunged 27% year over year while inventory has spiked 24%. The slowdown also correlates with the BC Government’s latest data which suggests foreign buyers have been dwindling for months. Time will tell how long China is able to sustain recent tightening. If China remains

Vancouver Condo Prices Continue to Accelerate in July Vancouver condo prices continued to tick upwards in July. A similar trend if you read the June report.  The average sales price hit $880,197 which is good for an 8% increase year over year. New listings saw a small increase but not enough to help inventory levels which are stuck at historical lows. Vancouver Condo Sales Vancouver condo sales fell 2.5% year over year, and for the first time since 2014, sales dipped below the ten year average for the month of July. With that being said sales remain robust and multiple offers continue to ravage desperate buyers. New Listings/ Inventory Levels A sigh of relief for all buyers, new listings for Vancouver condos increased 4% year over year and were just slightly shy of the ten year average. However, the big problem remains ultra low inventory levels. After years of excessive demand it has plunged inventory levels to record lows. With sales hardly slowing, inventory levels have not been able to replenish. The 975 active listings at the end of July, 2017 were the fewest recorded in recent history. Vancouver Condo Prices The price per square foot for Vancouver condos increased

Detached Homes Enter Buyers Market in July If you read my June Detached Report I highlighted how the detached market was transitioning towards a more balanced market after heating up during the busier spring season. In July, this trend continued. Vancouver single family homes officially dipped back into buyers territory with a sales to actives ratio of 12%. Detached Sales Detached sales have slowed considerably in the last few months. The data suggests this is more than a normal seasonal slow down. REBGV detached sales fell a modest 12% year over year, but now remain 20% below the ten year average for the month of July. Meanwhile, Vancouver West & East detached home sales recorded the fewest July sales over the past decade. New Listings & Inventory Similar to last month, new listings have been normalizing. REBGV new listings fell 8% year over year but were 4% above the ten year average for July. This appears to be happening across the board. REBGV active inventory dropped 2% year over year. Sales to Actives Ratio REBGV- 17% Vancouver East- 14% Vancouver West- 10% Burnaby- 11% Sales to Actives ratios dropped month over month, continuing a downwards trend from last month which

CRA Takes Aim at Condo Assignments & Foreign Buyers With prices escalating out of control in recent years, it has attracted a growing herd of speculators, eager to profit on a historical bull market. And profit they did. Perhaps one of the most lucrative ways to do it is through pre sale condos. The Scheme is a speculator’s dream, allowing buyers to leverage a favourable deposit structure and a rising market to flip the contract at a higher cost before completion. These flips are incredibly difficult for CRA to track especially if the buyer is overseas. A perfect concoction to make a quick buck and dodge the tax boogeyman. Feds Take Developers to Court That dream could be coming to an end. First reported over at BIV, The federal government is taking the developers behind the Marine Gateway project on Marine Drive and the Residences at West on southeast False Creek to court, probing for information on buyers who flipped their presale contracts before construction was completed to verify compliance with the Income Tax Act. This could be the first of many shoes to drop. As many Vancouver developments are being flooded with assignments, such as Kensington Gardens, which has seen

Vancouver Real Estate Overheating Led by Condo Market CMHC has it’s eye on Vancouver once again. Canada’s National housing agency believes the Vancouver real estate market is showing signs of overheating as per their latest report. “Conditions in different segments of the Vancouver market have further diverged since the beginning of the year. The townhouse and apartment markets are currently above the threshold for overheating, leading to higher asking prices and more dwellings selling in multiple offer situations.” Of course if you’ve been reading this blog this would come as no surprise. There’s been a clear divergence between the detached market and the condo market. Both appear to be going in opposite directions. The Vancouver detached market, although having a nice recovery in the spring, has failed to climb back to peak prices. The average sales price is down 8% year over year. On the other hand, you have the Vancouver condo market which could be reaching peak insanity, the sales to actives ratio recently exceed 200% for one bedroom units. Further, the average sales price is still climbing, up 14% year over year in June. The surge in condo prices is hardly surprising after a BC Government first time

Tudor House Vancouver by Formwerks Tudor House by Formwerks Boutique Properties is a boutique development in pre-construction phase to be located at 441 W 63rd Avenue in Vancouver’s Cambie Corridor. The architecture on this 4-storey building is classic Tudor style. There will be 15 residences, including townhomes with 1, 2, and 3 bedrooms. There will be 1-bedroom and 2-bedroom garden-level suites to choose from. The 3-bedroom dwellings include an optional den. In the fashion of British rowhomes, Tudor House is designed with steeped gables, pitched roofs, and decorative timbering. Each single-family home will include roomy kitchens, full-sized appliances, walk-in closets, luxurious finishes, and other generously appointed features. Nearby amenities to this tranquil location on Vancouver’s southwest side are abundant for the future residents of Tudor House. The boutique property is near top-ranked schools, Queen Elizabeth Park, Oakridge Centre, Vancouver College, and Marine Gateway. Rapid transit could hardly be more convenient. Vancouver International Airport is a short 10 minutes away, if you ride the Canada Line at Marine Drive Station. An Overview of Tudor House, Vancouver, Features The following is a brief synopsis of information about these pre-sale townhomes: Architecture is classic Tudor style 15 residences, with options of 1-, 2-,

Vancouver Condo Price to Rent Ratios Exceeds Major US Cities There seems to be no end in sight for Vancouverites hoping for more affordable housing. Vancouver condo prices are accelerating by about 2% each month, while renting isn’t getting any cheaper. According to PadMapper Vancouver was the most expensive city to rent in Canada. In June the median rent price for one bedroom units grew by 2.5%, settling at $2,090, while the median rent price for two bedrooms increased by 2.5% to $3,230. While rent prices have been increasing, they haven’t been able to keep pace with purchase prices. Hardly surprising since you can’t take out a mortgage to pay for rent, therefor rents tend to align much closer to local incomes. Here’s how the price to rent ratio’s shake up in Vancouver compared to a couple big time US cities that Vancouverites love to compare to. One Bedroom Price to Rent Ratio [table id=40 /] Two Bedroom Price to Rent Ratio [table id=41 /] So what does this mean? Here’s how Trulia Interprets Price to Rent Ratio’s: Price-to-Rent Ratio of 15 or less: Buying a home is a better deal than renting for people planning to live in a home

Demand For the East Side Explodes As Buyers Get Priced Out of the West As prices continue to surge, buyers are being squeezed further and further east. In fact, an incredible shift is underway, particularly amongst younger first time buyers who are desperate to enter the market.  East has become the new West, as hipsters multiply on Main Street. A great migration is underway… In June 2017, 60% of East Vancouver condos sold over asking price, that’s higher than the 53% on the West side. But even more gruesome is the sales to actives ratio in East Vancouver. It reached a mind boggling 148% in June, a new record that has never been seen before. Just for context, a sales to actives ratio of 20% is considered a sellers market. The ten year average for the month of June is 29%, so 148% last month is truly considered a blow off top. One Bedroom Condos Face Explosive Demand The demand for one bedrooms is even more fierce. One bedroom inventory has plummeted 45% year over year, pushing the sales to actives ratio to a whopping 206%. That means for every new listing there are two sales. Buyers Spend Over $96

Multiple Offers Surge for Vancouver Condos, Particularly on the East Side The Vancouver condo market continues it’s upwards surge into parabolic territory. In my Vancouver Condo Report June 2017 I highlighted that new listings fell year over year, and inventory plummeted 20% year over year. This has created a flurry of bidding wars, price discovery has been thrown out the window. Multiple Offers Increasing Multiple offers seem to be expected on just about any condo. Sales over asking price have been rising. In June, sales over asking price for Vancouver West condos hit 54%, that’s above last years 49%. Not included on this chart is the East side of Vancouver, where the madness was even more severe, 143/237 condos sold over asking price, or 60%. Sales to Actives Ratio Still Increasing The sales to actives ratio hit a whopping 82% in June which is indicative of an insanely hot sellers market. Days on Market Still at Record Low Naturally, days on market has remained low, currently sitting at 8 days. The standard procedure of listing it and giving it one week exposure before multiple offers is very prevalent. Buyers are being forced to speed up much of their due diligence