Vancouver Condo Info

The Canadian Real Estate Association has just released an updated housing market forecast and predicts that next year BC will see the steepest house sales price drops anywhere in Canada.

The association predicted a 7.8 per cent decline next year in the average residential sales price in B.C., compared to a 2.1 decrease across Canada.

Average price is forecast to reach new heights in six of 10 province in 2009, but B.C., where lower sales activity is expected, will continue to weigh on the national average price, the association said in a news release.

The association is forecasting an 11.7 per cent drop in sales activity in B.C. for 2009, compared to a three per cent drop across the country.

Hat-tip to Richard for the story link.

Friday is here once again, lets do our end of the week news and link round up.  Here’s a few to get the conversation started:

-Vancouver Condo Wiki – supply updates!
-In unstable economy, renovate (don’t buy)
-Vancouver RE boom is over, more declines ahead.
-Vancouver guarantees $100 million for Olympic Village
-When should you start marketing your 2010 rental?
-City gives up 4.3 million in development fees
-Nanaimo hotel becomes election issue
-RRSP participation rates low
-Toronto real estate falls below 2006 levels
-Canadian building permits rise in September
-London Olympic village needs £1 billion bail out.
-Real Estate Downfall (youtube)

So what are you seeing out there? Post your thoughts, news, links and anecdotes here and have an excellent weekend!

note: any conversation on Vancouver, real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

Remember that rumour that the construction of the Olympic Village is running into credit difficulties and the various assurances that taxpayers wouldn’t be on the hook?

Well funny thing.. It turns out the city has authorized a (until now) secret $100 million rescue for the financial troubled Olympic Village.  Article in the Globe and Mail:

The new financial obligations are on top of a $190-million loan guarantee the city had to give Fortress Investment Group, which has provided a $683-million loan to Millennium to build the 1,100-unit village.

The village is destined to become a residential complex after the Olympics but most of the condominiums have yet to be sold. Meantime, the value of real estate in Vancouver has plunged in the past several months and is expected to continue to decline over the next couple of years.

This has raised questions about the future of the project and whether Millennium, which agreed to pay the city $193-million for the land on which the village is being built, can still make the venture financially viable.

The latest revelations come despite assurances over the last several weeks by civic officials that financing around the project was not a concern. Other civic officials stated publicly there had not been any changes in the agreement the city had with Millennium – even after council had secretly agreed to forward the company and/or its lender up to $100-million to keep the project afloat.

Now you’re all real estate speculators.  This deal is of course, not without a bit of controversy:

Details of the city’s involvement in bailing out the project’s cash-strapped developer have until now been kept secret. Councillors are under a publication ban and have been told they face serious repercussions if they discuss publicly the decisions taken at the in camera meeting.

Growing controversy around the project also appears to be behind the yet-to-be announced resignation of the city’s chief financial officer, Estelle Lo. Ms. Lo tendered her resignation recently after months of apparently expressing concerns the city might be assuming too much financial risk in an effort to meet its obligation to get the Olympic housing built on time, according to a source.

Now that we’re all investors in this project, I find myself getting excited about the future of Vancouver real estate. I’m sure eventually this deal will pay off big – In Montreal it only took 30 years to pay off their Olympic sized debt, and just look at some of the great post-Olympic buying opportunities in Sidney!

2008 - Vancouver House Prices Down almost 10% from the peak.

According to statistics released by the Real Estate Board of Greater Vancouver, the benchmark price for a single family home in Metro Vancouver is down 9.8% from the May 2008 price peak and down 4.7% from the October 2007 price so far.  From an article in the Vancouver Sun.

Greater Vancouver saw MLS sales of 1,364 units in October compared with 3,028 in the same month a year ago.

Single-family home sales across the region dropped to 493 units in October from 1,368 in October, 2007. Condominium sales were also down substantially to 493 units from 1,133 in the same month a year ago.

Dave Watt, the Greater Vancouver board’s president, said sales are not keeping pace with B.C.’s current economic conditions with low unemployment and stable interest rates.

“That’s a direct result of a loss of consumer confidence in the overall market,” Watt said.

In the Fraser Valley, the detached house price hit $513,892 in October, down 6.5 per cent from May and 0.6 per cent below the average price of October, 2007.

MLS sales of 768 in the valley were 48 per cent below sales levels of the same month a year ago.

Gordon Campbell has pledged to freeze BC property tax assessments at their 2007 level to ‘help people cope with turbulence in property values’.  I’m trying to figure out the motivation for this move, perhaps to people that don’t understand property tax it seems like a relief?  Our property tax system is not set up like California, where property tax is dependent on the assessed value.  The crashing California real estate market has meant less money flowing into government coffers, leaving cities scrambling to make their budgets work.

In Vancouver your property tax assessment only matters in its relation to your neighbors.  Every house price in Vancouver could drop across the board by 50% and the property tax paid by each owner would remain the same.  This protects city tax income, but can be tougher on tax payers.

Tax assessments in Vancouver are done in July, which coincidentally was very close to our market peak.  Freezing assessments at their 2007 value may help to make it appear house prices haven’t fallen as far as they have if the 2008 assessments are never made public.  I don’t believe this is a motivating factor though, since the REBGV benchmark price and average sales price data still paints a more complete picture.