BC, data, hype

Realtors warn of dramatic sales slump for September 2016

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111 Comments

Do you feel like someone should have warned you that Vancouver real estate sales slumped dramatically in September? Well now you have been.

VANCOUVER — Real estate agents say home sales continued to fall dramatically in the Vancouver area last month and even hit a 10-year low in some neighbourhoods.

Agents say the high-end detached home market is seeing the most substantial losses, while the condominium and townhome market remains active.

The Real Estate Board of Greater Vancouver, which covers a large swath of Metro Vancouver but excludes several large suburbs including Surrey, is set to release its home sales data for the month of September tomorrow.

Read the full article over at the Vancouver Sun.

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BDK2016

If strata properties decline that much REIT and pension funds will buy them for their attractive cap rates.
If you chart Vancouver Condo prices back to 2008, they were very high relative to the amount of the monthly rental and then it took 7 years for the condo prices to appreciate again, because it started to make sense to own again. in Back then I was sure condo prices would crash, they slid a bit but basically stayed flat for 7 years until rent caught up.

Ive been gone from posting from this board for 6 years, glad to see a few familiar names like ULSTERMAN

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trackback

[…] home sales have plunged by about a third in the last month or so, this been largely blamed on the foreign buyer […]

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bullwhip29

BMO Falls as Restatement Seen Akin to Cutting $1 Billion Capital
http://www.bloomberg.com/news/articles/2016-10-04/bmo-restatement-seen-as-equivalent-to-cutting-1-billion-capital

>>> red flags everywhere i look…

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bullwhip29

Vancouver homeowners missing out on $30 M in grants, says councillor
http://www.cbc.ca/news/canada/british-columbia/city-of-vancouver-homeowners-grant-review-1.3790563

>>> yes, the 35.3% of Vanc homeowners with properties assessed at > $1.2M are not eligible for a tax break. boo hoo…

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Billybonger

Can a person get a pre approval under the current (pre 17th) rules and carry those same terms as an open option for a period of pre approved time after the change?

If so, this will bring some buying forward for a while longer again.

Will we see Oracles’s 7,000 listings by year end?

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bullwhip29

i think so as long as mortgage funds by march ’17. will 2 wks make much difference though. doubtful…

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patriotz

The pre approval is from the lending institution only and does not protect the would be borrower from rejection by the mortgage insurer due to regulatory changes. No insurance, no mortgage.

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bullwhip29

i understand another announcement re. massive hikes to premiums is imminent

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yvr2zrh

This is not true from what I can see. Existing pre-approvals are ok for deals signed in the coming 2 weeks and closing by March 1. If you did not get your pre-approval yesterday, you are SOL and under the new rules already. So – the big rush – will only come from those who were already pre-approved but had not yet done a deal. . . And – if you are pre-approved but don’t have subject removal by Oct 17 – then you are also SOL.

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Ktown

Who cares? Only a complete idiot would try to sneak past the new lending rules and over leverage themselves into a market that is crashing. Anyone stupid enough to do this deserves to lose every penny they put into it.

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Chinabuyeverything

Sound familiar?

In conclusion, the lesson seems to be that the marginal New York City buyer has been priced out of the market (volume down 20%) while sellers have not yet accepted that the bubble has burst deciding instead to maintain listing prices while letting their apartments sit on the market longer amid growing inventory levels. Meanwhile, the luxury market is the only segment that seems to be holding up which only serves to prove that Chinese billionaires still have cash they would like to hide in the U.S.

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patriotz

http://www.zerohedge.com/news/2016-10-04/nyc-real-estate-bubble-bursts-apartment-sales-crash-20

Typical zerohedge, all numbers cited are for Manhatten only, not all of New York City as the source document (Elliman) makes clear. Also the Chinese are hardly the only ones buying in the Manhatten luxury market.

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southseacompany

“Ottawa throws proverbial cup of water to cool hot housing market”, BNN Video
http://www.bnn.ca/real-estate/video/ottawa-throws-proverbial-cup-of-water-to-cool-hot-housing-market~964728

“Ottawa has unveiled new mortgage rules that are making it harder for Canadian homebuyers to qualify for a mortgage. James Laird, co-founder at RateHub.ca and president at CanWise Financial, talks about just what you’d be able to afford under the new requirements. He also talks about why the new measure isn’t as significant at cooling home prices as it may sound.”

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Billybonger

I am bemused by the spin and the mythical “benchmark” pricing for Sept.

Good luck with that.

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southseacompany

“Vancouver home sales drop nearly 33% as new tax takes hold”, Globe & Mail
http://www.theglobeandmail.com/real-estate/the-market/vancouver-home-sales-drop-nearly-33-in-september/article32229083/

“The benchmark price for detached houses, condos and town homes slipped 0.1 per cent in September, compared with August. The benchmark price, a representation of the typical property in an area, is up 28.9 per cent over the past year in the region, the Real Estate Board of Greater Vancouver said Tuesday.”

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southseacompany

“Vancouver homes sales plunge nearly 33% in second month since foreign buyers’ tax”, Financial post
http://business.financialpost.com/personal-finance/mortgages-real-estate/vancouver-homes-sales-plunge-nearly-33-in-second-month-since-foreign-buyers-tax

“Average existing detached home prices dropped 4.2 per cent in one month while home sales dipped below a 10-year monthly average for the first time in more than two years.”

“The Real Estate Board of Greater Vancouver said Tuesday the average detached home in the region sold for $1,532,242 in September, down from $1,470,265 a month ago. At the same time, the average price of a condominium climbed 3.8 per cent in a month earlier, reaching $549,214.”

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bullwhip29

“average detached home in the region sold for $1,532,242 in September, down from $1,470,265 a month ago”

>>> so even UP is DOWN now? lol…

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UBC in Crisis Mode

The number does not matter, they are not real. Trump said he won all online pools after the last debate.
Do you know any other cities in western democracy controlled by the developer and RE industry besides Vancouver?

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bullwhip29

*** just noticed that wording was correct, but the figures were reversed (wonder if this was intentional???). article has been edited. so DOWN is DOWN…

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bullwhip29

actually taking another look, $1470265 was the figure for august as previously reported. if sept was in fact 1532242 then prices climbed 4.2% in sept MoM

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bullwhip29

article corrected
http://business.financialpost.com/personal-finance/mortgages-real-estate/vancouver-homes-sales-plunge-nearly-33-in-second-month-since-foreign-buyers-tax

>>> let’s see how long it takes someone to dismiss sept price increase as nothing more than a dead cat bounce

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HAMster

Mass murder in China:
Yang Qingpei argued with his parents over money…
http://www.news1130.com/2016/09/30/man-suspected-of-killing-parents-then-17-neighbours-in-china/

The deaths are one of the bloodiest mass slayings in recent years in China, where deadly random attacks on schools and public transport have been blamed on people bearing grudges against their families, neighbours or society in general.

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Billybonger

Suspect we’ll see a bit of a surge in condo purchases as borrowers look to beat the 17th change. Will put some $ into the pockets of realtors and mortgage brokers. I suggest they save as much of it as possible. Boom bust, I am of the same view wrt this becoming by the biggest bust in city history. Anyone who can’t see this for the epic debt fueled bubble that’s it is must be daft. Or, an oracle of some kind. We could see the bank of canada drop rates, this gives them some cover to do so, and they want the Canuck buck lower as the economy is in the doldrums. But I don’t see see that helping W hat I believe will be a multi year decline in housing prices in Vancouver. Unless, of course, oracle and… Read more »

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Boombust

Oh, this IS the end, alright. No turning back now.

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patriotz

Two years from retirement, widow wonders whether she can afford to buy a house

Yes there’s still time to buy that ticket for the Titanic.

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bullwhip29

you wonder how many stories of retired or nearly retired boomers who have lent big chunk of nestegg to offspring and other relatives to get into this freakshow of a market in the last few years? and now with what’s occurred over the last couple of months, many of these buyers just lost their down payments in a snap of a finger

this could all turn into a catastrophic mess for millions very quickly

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HAMster

My renter neighbours who have four young kids bought an investment property house in Maple Ridge in March because they thought they must for the sake of their children… buy now or be priced out forever FOMO . When people like this dive into the market, I know it is over. I hope they don’t lose too much money.

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Royce McCutcheon

I come from a household burned by buying at the exact wrong moment leading up to the early 1980s crash. All I can say is that, while I can look back and see how we might have been financially wanting at times, I had a great childhood and incredible support. If/ when people we care about take a hit on this – if this is the top – it’ll be important to remind them that this doesn’t define them or doom their kids.

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bullwhip29

it is one thing being underwater and owing the bank money. having to witness your parents delaying retirement and/or returning to work is another matter. those that wind up in a mess like this can forget about funding their own kids’ education, housing etc

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Oracle

With the new reporting requirement for a sale of primary residence, I think this has the potential to get much of the speculation out of housing.

As a renter, gather information to prove you’re renting a home. Gather information from land registry to see if your landlord has other properties. Then see if he claims the exemption in future on any properties and report them.

This tax evasion is costing billions.

If all renters do that, I think it has the potential to seriously affect the market.

Anyone want to comment on the suite in house/exemption situation?

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bullwhip29

“Gather information from land registry to see if your landlord has other properties. Then see if he claims the exemption in future on any properties and report them.”

>>> good luck with that

also portion of principal residence used as a rental suite is not exempt and never has been. this is nothing new.

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southseacompany

“Four major changes to Canada’s housing rules”, Globe & Mail
http://www.theglobeandmail.com/real-estate/four-major-changes-to-canadas-housing-rules/article32223470/

1. Expanding a mortgage rate stress test to all insured mortgages.

2. As of Nov. 30, the government will impose new restrictions on when it will provide insurance for low-ratio mortgages.

3. New reporting rules for the primary residence capital gains exemption.

4. The government is launching consultations on lender risk sharing.

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bullwhip29

regarding item #1 banking software will do this automatically in case anyone here was wondering if parameters of test could be massaged and/or test itself could be waived.

i am also hearing through the grapevine that premiums on insured mortgages are set to at least double if not triple. stay tuned, lots of moving parts that havent settled out yet

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southseacompany

“Vancouver’s $1,000-a-Day Home Price Escalation Starts to Stutter”, Bloomberg
http://www.bloomberg.com/news/articles/2016-10-04/vancouver-s-1-000-a-day-home-price-escalation-starts-to-stutter

“Signs are mounting that North America’s once-hottest real estate market — where the average home was appreciating by more than C$1,000 a day — is entering a downturn. Gone are the days of frenzy when buyers placed bids without inspecting properties and sellers collected all-cash offers. Properties are taking longer to sell, transactions are plummeting and in some cases prices are coming down in a city where the cost of housing has doubled in the past decade”

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paulb

New
276
Price Change
102
Sold
152
TI:9769

http://www.paulboenisch.com

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Lurker

How did we drop under 10000 if there have been more listings than sales every day?

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Newcomer-can\'t-post

Expieries.

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Oracle

9K party.

Will we see an 8K party on Nov 1st?

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rockerguy

The sold vs inventory figures (i.e. absorption rate) are still really healthy, so I would not consider the market to be in full scale collapse. Absorption is running at about 20%; a sellers market starts at 25%-ish. If you own property, I think now is the time to get it on the market. If you wait for inventory to hit 12,000 before hitting the panic button, I think there is scope to really lose out.

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mls watch

Sunshine Coast: my favourite stat website: http://www.garylittle.ca/stats.html

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Skook

He’s been s go to source , too.

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Skook

..a go to source, too

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Bag it and tag it

Interesting that sales for the year are way up over the past couple years, but down a lot over Sept last year. This could indicate a pause in the cycle of boomers cashing out in Van and buying a retirement home up there, due to very low detached sales in Van. Could also mean those leaving Van to buy in more affordable areas, such as SC, have also pushed the pause button to see how things pan out here first…

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bullwhip29

from approx jan to july pretty much every available det home w/ decent lot and/or view was gobbled up. there is nothing to choose from now. similar activity witnessed elsewhere like on vanc island for instance. prices in vanc for a comparable property are still 3,4,5x that of SC. the one wild card in all this is the proposal for a fixed link from mainland which is currently being reviewed. i think even if the foreign tax is extended to the rest of BC (probably not happening imho) that very desirable areas like this would be highly sought after if the situation with the ferries is remedied via a toll bridge/highway and/or some improvements are made to the existing ferry service

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Chinabuyeverything

A city of paper millionaires and the food bank at its lowest levels since 1982

For Shane. 🙁

http://globalnews.ca/news/2981017/vancouver-food-bank-suffering-from-historically-low-supply-of-food/?campaign_id=A100

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Newcomer-can\'t-post

Many paper millionaires may be feeling a little less free with their money. It may be up to the bears to carry things for a while. I just donated. Let’s do our part.

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Sellnoworbepricedin4evah
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bullwhip29

not just millionaires. any average joe that just scrounged up cash to buy in the last 12-18 months just lost his/her down payment in a matter of weeks. psychologically this will have a bigger impact than if some rich a$$hole made what amounts to a bad trade with house money

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Hyper-mega-Bull

some groups don’t believe in charity for those that don’t look like them.

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bullwhip29

and not to beat a dead horse with a stick, but many anecdotal stories of many well to do people being seen at food bank just for the freebies.

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Ulsterman

Didn’t the Feds change the mortgage qualifying rule a few years ago? I found this on Canadian Mortgage Trends:

As of April 19, 2010, all insured variable and 1- to 4-year fixed mortgages over 80% loan-to-value must be qualified using the posted 5-year fixed rate, as published by the Bank of Canada every Thursday.

How does today’s announcement differ significantly?

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Its_the_ALR_stupid

My understanding is that 66% of buyers with insured mortgages have been choosing 5 year fixed, which were not previously covered by the regulation. Now they are. That will make a big difference.

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Ulsterman

Ah yes, that is a big difference. I only wish they’d brought the rule changes in with immediate effect.

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Oh NO

Cousin is a mortgage broker….he has his house listed…fingers crossed and bank account twisted. Hes leveraged and sweating bullets

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bullwhip29

never fails that those operating directly on the frontlines consumed the most cool aid. esp all the new upstart big swinging dicks out there who thought their overnight fortunes a result of financial wherewithal, business acumen and what not VS pure dumb luck, in right place at right time etc.

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bullwhip29

i believe only CWB requires clients to re-qualify their mortgages. if this becomes common practice at the big 5, then look out.

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Newcomer-can\'t-post

It has gone from “variable and 1- to 4-year fixed mortgages over 80% loan-to-value” all mortgages.

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YVR

It is the Bank of Canada posted rate you have to qualify for now instead of the banks 5 year mortgage rate. The difference is the banks rate is 2.17% compared to the BoC rate at 4.64%. In other words as far as qualifying goes rates just doubled.

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would-be buyer

The real story is having to qualify at the posted 5 year rate – 4.64%. How can this not tank the market? I ran the numbers and for the average 2 br CONDO of $600K (forget about a SFH) with 10% down you need a family income of $126K. That’s $45K more than the average Vancouverite family earns. If you only have 5% to put down, you need a qualifying income of over $200K. If the market doesn’t correct then we know there are no locals in this market. Even if Vancouver holds strong, there is no way it can’t bring down markets in Coquitlam, New West, Surrey, North Vancouver etc.

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Ktown

Paulb must be out looking for a new job?

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Skook

Realtors have to have begun hurting especially those just starting out. Did you know that at more than 500 new Realtors joined the Board in the six months from Mar 1st to Aug 31st this year? No? Well, I didn’t either. I’ve posted details today on my stats blog…

https://sunshinecoastbcrealestatestatistics.blogspot.ca/search/label/RE%20-%20The%20Economic%20Spin…offs

I’ve also added two Sunshine Coast stats posts – both are for Dec 2015 to finish off that year.

PS. I apologize if a similar post shows up later. An earlier attempt is awaiting moderation (added coding to the link) which hopefully means it never sees the light of day – don’t know how often The Pope checks.

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Skook

Sorry, that link didn’t work. Hope this does…

https://sunshinecoastbcrealestatestatistics.blogspot.ca/2016/10/rebgv-pumping-re-industry.html

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