Sanjin Cvetkovic : Archived blog posts for : October 2009

Recession rebound to propel B.C. housing sales, prices ‘to new highs’: forecast

Posted on October 26, 2009 by By Derrick Penner, Vancouver Sun

The rebound in B.C. housing sales from the recession is the strongest on record, Central 1 Credit Union said Tuesday, predicting that property prices will regain all of their downturn losses by the end of this year.

Central 1 chief economist Helmut Pastrick said the housing sales rebound has already surpassed the strength of the recovery from the 1991 recession.

Pastrick said the resurgence has combined with diminishing inventories of unsold homes to force prices upward.

Prices will eventually hit an “affordability squeeze,” Pastrick said, reaching a ceiling that forces new buyers out of the market.

However, in one of the first major fall housing forecasts, Pastrick said observers should not “underestimate the power of ... very low and attractive mortgage rates” to keep driving the market.

He said that as buyers embrace historically low mortgage rates, that momentum “will carry into 2010, driving unit sales and prices to new highs.”

He predicted that, on an annualized basis, the overall average home price in B.C. will climb to a new high of $463,800 by the end of 2009, erasing recession-era losses, before advancing to $497,800 in 2010 and $534,800 in 2011.

He also forecast that sales through the Multiple Listing Service across the province will climb to 85,500 this year, and 109,000 in 2010.

Not all regions will experience the recovery equally, Pastrick said. The gains will be concentrated in the bigger, higher-priced markets of Vancouver, the Lower Mainland and the Okanagan, and no single region will see annualized average prices for 2009 surpass previous peaks.

Pastrick said his forecast relies on B.C. continuing to recover from the recession, and that at some point in 2010 the pace of sales will slow down. He expects sales transactions to slip to 101,400 in 2011, though prices should continue to rise.

The Central 1 forecast calls for B.C. housing starts, after falling to 14,600 units this year from 34,321 in 2008, to recover to 21,400 units in 2010.

“If [economic] recovery is weak, or does not come, then prices could potentially stop rising and back off somewhat,” Pastrick said.

Carol Frketich, regional economist for Canada Mortgage and Housing Corp., said in an interview the Central 1 forecast is consistent with other forecasts for the B.C. market.

Frketich said forecasters are getting a very strong signal from housing resale activity that points to an overall pickup in housing.

However, she said the fact that Lower Mainland markets have accounted for 40 per cent of total provincial sales has had an influence on provincial totals. A lot of higher-priced homes have been selling in the region, which helps push up the average provincial price.

The Lower Mainland has also seen its unemployment levels decline, another positive indicator that economic conditions will improve.

“The key to strength in the housing market is, we need to see the recovery continue, and mortgage rates staying relatively low,” Frketich said. “And currently, those are the conditions we have.”

Cameron Muir, chief economist for the B.C. Real Estate Association, however, maintained a more conservative outlook for home-price growth, given that the market is up against a slow economic recovery.

“My expectation is that home prices will grow very modestly in 2010,” Muir said.

Muir said much of the buying activity in the market is the result of demand that built up during last fall’s market collapse.

However, as that demand is filled, and as mortgage rates rise in the latter half of 2010, Muir said he expects sales will ease off the record pace that Pastrick has predicted, “reflecting an economy that is coming out of recession.”

Read

REBGV Latest News

Posted on October 15, 2009 by Sanjin Cvetkovic

BC Housing Market Gains Momentum

Vancouver, BC – October 15, 2009. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 68 per cent to 8,576 units in September compared to the same month last year. The average MLS® residential sales price in the province climbed 15 per cent to $474,169 from $412,149 in September 2008.

"Upward momentum in consumer demand continued unabated in September,” said Cameron Muir, BCREA Chief Economist. “Low mortgage interest rates and renewed confidence in real estate assets has propelled BC home sales to a level not seen in two years.” September posted the highest number of BC MLS® residential sales for that month since September 2005, and the third highest ever recorded for the month of September.

"While Victoria and the Lower mainland are exhibiting strong sellers’ market conditions with rising prices, housing markets in the rest of the province are experiencing a more gradual recovery,” added Muir.

Year-to-date, MLS® residential sales dollar volume increased 6 per cent to $29 billion over the same period last year. A total of 63,521 units were sold in the first nine months of 2009, up 6 per cent from 2008, while the average MLS® price declined 1 per cent to $457,389.

Full PDF report click here

Read

September Stats

Posted on October 2, 2009 by REBGV

Posted in real estate, sales, stats

Buyer demand remains strong while home listings increase

Greater Vancouver home sales remained strong last month, with the second highest number of residential sales ever recorded for the month of September.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,559 in September 2009, an increase of 3.4 per cent from the 3,441 sales recorded in August 2009, and an increase of 124.5 per cent compared to September 2008 when 1,585 sales were recorded.

“As homes sales in Greater Vancouver continued at an elevated pace in September it’s encouraging to see that more homes were listed on the MLS® in the month than any other so far this year,” Scott Russell, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,764 in September 2009. This represents a 6.2 per cent decline compared to September 2008 when 6,142 new units were listed, but a 26.8 per cent increase compared to August 2009 when 4,544 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.

At 12,596, the total number of property listings on the MLS® increased 5.5 per cent in September compared to last month and declined 36 per cent from the 19,852 homes listed for sale during the buyer’s market that was experienced at this time last year.

“During this period of renewed demand in our marketplace, home values have gradually recovered from the declines that occurred in 2008,” said Russell.

Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 13 per cent to $547,092 from $484,211, while home prices compared to Septembers 2008 levels are up 1.6 per cent.

Sales of detached properties increased 160.6 per cent to 1,423 from the 546 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 2.1 per cent from September 2008 to $741,632.

Sales of apartment properties in September 2009 increased 94.9 per cent to 1,489, compared to 764 sales in September 2008. The benchmark price of an apartment property increased 1.5 per cent from September 2008 to $374,686.

Attached property sales in September 2009 are up 135.3 per cent to 647, compared with the 275 sales in September 2008. The benchmark price of an attached unit increased 0.4 per cent between Septembers 2008 and 2009 to $466,276.

Download complete stats package by clicking here.

Read

HST - How it affects you

Posted on October 1, 2009 by BCREA

Posted in gst, hst, provincial, real estate, taxes

What the HST means for you

The provincial government's decision to harmonize the provincial and federal sales taxes into the new 12% HST will remove $2 billion in costs to BC businesses and provide point-of-sale rebates on many important goods and services.

However, we are concerned that the proposed HST will increase the cost of buying and selling all property and have a significant impact on the purchase of newly-built homes.

Increasing Cost of Professional Services like REALTOR® Commissions

Under the previous system, only five per cent GST was charged on professional services associated with real estate transactions such as appraisals, inspections and REALTOR® commissions.

Under the proposed HST, the taxes charged on those services will jump an additional seven per cent, adding to nearly all closing costs.

Increasing Cost of New Homes

For new homes, under the previous system, only five per cent GST was charged on new home sales. Under the proposed HST, a very complicated new arrangement will drive up the cost of new homes.

Partial Rebate Not Enough

To offset the increase in costs, the BC Government plans to offer a partial rebate of the HST for new housing, intending that new homes up to $400,000 should bear no more tax than under the current PST system. Homes above $400,000 will receive a flat rebate of $20,000. New home sales over $400,000 will be dramatically impacted, as buyers will have to pay an additional seven per cent tax on amounts over $400,000.

Consider a new home in Greater Vancouver: with a current Housing Price Index benchmark price for all new residential properties combined (single family detached, townhouse, and condo) of $528,821, the current taxes (GST and the Property Transfer Tax) total over $ 35,000. On July 1, 2010, the same home buyer will pay almost $5,000 more in taxes due to the HST.

British Columbians Already Taxed Unfairly on Housing

In addition, the Property Transfer Tax already requires BC homebuyers to shoulder an unfair tax burden. British Columbians pay 222 per cent more in land transfer taxes per transaction than the average Canadian.

The BC Government levies a Property Transfer Tax rate that is 129 per cent higher than the average for Canadian provinces. Higher property prices are not solely to blame for this scenario; prices in British Columbia are 45 per cent higher, so the inequitable structure of the BC Government's Property Transfer Tax adds an additional burden of up to 177 per cent.

Read