Inventory posted some more interesting stats: New unit sales in Vancouver West during August for the last 15 years – we’re just about to the half way point for this month, but that number looks low!
August Van. West – NEW units sales (homes, condo, townhouses)
1994 = 53
1995 = 72
1996 = 148
1997 = 220
1998 = 72
1999 = 144
2000 = 57
2001 = 90
2002 = 56
2003 = 89
2004 = 85
2005 = 138
2006 = 99
2007 = 96
2008 = 30
2009 = 94
2010 = 6 ***Aug 17
No Longer Looking points out this great editorial in the Vancouver Sun. I’m trying to figure out if it’s intent is the calm people about the Vancouver real estate market slow down, or freak them right out:
I penned this editorial to calm fears that the real estate market in Vancouver was collapsing and I’ve added some brief comments at the end.
Living in Canada’s most expensive housing market, residents of the Lower Mainland are obsessed with real estate prices and mortgage rates.
And no wonder. The benchmark price for detached homes in Metro Vancouver last month was $793,193. A down payment of 25 per cent would leave the buyer with a mortgage of $594,894, in which case a difference of just one percentage point in the interest rate can vary monthly payments by $500.
In comparison, the average price of a house in the Greater Toronto Area is $420,482. The standard down payment brings the mortgage to $315,316 and the interest rate impact to $260.
They recommend NOT walking away from an underwater mortgage – just keep paying more than they house is worth, after all:
..it might be a few years, perhaps a decade, before real estate prices return to the heady levels of 2007. But there’s a good chance they will.
Both Jimmy and Patriotz pointed out this story: real estate markets around the globe are slumping once again, but the change is most dramatic in Canada.
Canada led in the global housing recovery in the first quarter of 2010, but moderating global growth, heightened financial market volatility and sluggish job creation have led to a “dramatic” slowdown in Canada, according to the Global Real Estate Trends report released Tuesday from Scotia Economics.
“Global real estate markets entered 2010 with a renewed sense of optimism, piggybacking on the broader economic recovery underway,” Adrienne Warren, senior economist at Scotia Economics said in the report. “Housing demand and pricing improved in the first quarter of the year in the majority of the advanced nations we track, benefiting from ultralow interest rates, improved affordability, and in some cases, government purchase incentives.”
Australia and Canada, with inflation-adjusted average home prices rising at double-digit rates, led the pack, echoing their relatively favourable employment and lending conditions. Sweden, Switzerland and the U.K. also saw home price increases, while U.S. and French markets reported small declines.
..of course that ‘most dramatic’ change in Canada means the gains are a lot smaller than they used to be, here in Vancouver we’re just starting to see small losses – mostly less than 5% so far.
The hot summer is not so hot for the Vancouver real estate market which seems to be withering on the vine. July saw the third month of price declines that started at the April peak. If this keeps up how much longer will we be able to hold on to our coveted ‘most overpriced real estate in North America’ status?
Here’s the story in the Sun: Sales plummet in July
Lower Mainland real estate markets saw their slowest or near slowest July in a decade, the region’s real estate boards reported Wednesday, with sales down by almost half from July 2009’s red-hot markets and prices slipping from the previous month’s levels.
Here’s the Globe and Mail: Vancouver Homes Market goes cold
And there’s a lot of supply on the market, threatening to pull prices lower, with inventory levels 33 per cent higher than this time last year, according to the Real Estate Board of Greater Vancouver.
“With the pace of home sales and listings easing off in our market, we’ve begun to see a levelling of home prices from the record highs seen in the spring, creating greater affordability,” said Jake Moldowan, the board’s president. “Activity in today’s marketplace is clearly trending in favour of buyers.”
Here’s the PDF stats package and Crashcow rounded up the following list of benchmark price slippage since April:
Residential (GVRD)
Greater Vancouver: -3%
DETACHED
Greater Vancouver: -3%
Burnaby: -2%
Coquitlam: -5%
Maple Ridge: -3%
New Westminster: 3%
North Vancouver: -3%
Pitt Meadows: -7%
Port Coquitlam: -7%
Port Moody: -3%
Richmond: -3%
South Delta: -5%
Vancouver East: -3%
Vancouver West: -4%
West Vancouver: -3%
ATTACHED
Greater Vancouver: -2%
Burnaby: 0%
Coquitlam: -5%
Maple Ridge & Pitt Meadows: -2%
North Vancouver: -4%
Port Coquitlam: 0%
Port Moody: -6%
Richmond: 1%
South Delta: -1%
Vancouver East: -8%
Vancouver West: -4%
APARTMENT
Greater Vancouver: -2%
Burnaby: -2%
Coquitlam: 0%
Maple Ridge & Pitt Meadows: -2%
New Westminster: -3%
North Vancouver: -2%
Port Coquitlam: -1%
Port Moody: 0%
Richmond: 0%
South Delta: -2%
Vancouver East: -5%
Vancouver West: -3%
West Vancouver: -12%
The July stats package from the REBGV should be released soon, but in the meanwhile Inventory shared some interesting month end stats for unit sales – they’re dropping all over the place compared to the same month last year:
Here’s an interesting comparison that came up in in the discussion earlier comparing a couple of North American property markets. First off space889 pointed out this nice large lot on the west side of Vancouver that is up for sale asking $3,280,000 – the oil tank has been removed and this property could be used to build your dream home near Oak street, or you could just hold onto it and wait for it to appreciate.
Crabman then pointed out this property in a place called Beverly Hills on a slightly larger lot asking $3,200,000.
Here they are side by side for comparison:
Local developer Ian Gillespie is experimenting with the idea of building a downtown condo that is affordable to a couple making minimum wage. The tower would be located on Cordova between Gastown and the Downtown Eastside. To keep costs down it will feature simple finishes, no parking, and owners would do their own maintenance instead of paying strata fees to cover repairs. To try to keep out speculators and flippers they will require the units to be owner occupied.
The 108-unit project is a collaboration involving Vancity credit union, Habitat for Humanity and a Downtown Eastside housing group. Habitat will get four condos suitable for families in the building and will choose who gets them. Another eight units, to be managed by the PHS housing society, will go to local community workers.
The remaining 96 condos will go to buyers who will have to prove that they plan to live in the units and who agree to do some maintenance themselves instead of just paying standard condo-maintenance fees. According to the material submitted to the city, nearly three-quarters of the condos will sell for less than $300,000, and more than half will be affordable to people making between $29,000 and $36,000 a year. That’s the income of an individual earning $15-$19 an hour, or a couple in which each partner makes the $8-an-hour minimum wage.
One interesting point: one of the reasons they can build this condo development for cheaper is because the land got cheaper:
The land, previously owned by developer Robert Wilson, was repossessed by Vancity last year. He had purchased it for $7.9-million in July, 2007, shortly before the city’s real-estate market deflated. It’s now assessed at $5.4-million.
Read the full article in the Globe and Mail.
Inventory shared some interesting data with us on Friday:
sales numbers going back to 1995.
Sales numbers for this month up to last Friday continue to be very low, almost reaching back to their 2008 lows, except when it comes to new unit sales, which are lower percentage wise than we’ve seen in the last 15 years. As of Friday new units sales are down at the 25% level.
The boom has gone bust inland and we’re starting to see more and more of these news stories about it. Jimmy pointed out this link to some coverage over at news 1330:
Advertised prices on many new developments are down between 20 and 30 per cent, six-figure savings in some cases. And if you really hunt, developer Matthew Hay says deeper discounts can be had.
He says too much inventory was built up before the recession hit, and the newly imposed Harmonized Sales Tax is not helping the market either. “So now not only is there a surplus of product on the market, but you’ve got a whole buyer demographic that is nervous, cautious, sitting on their wallets, waiting to see how things shake out.”
Some of the developers are offering incentives on top of the discounts like covering the HST, or the GST. Hay says some developers are desperate to sell and that is putting downward pressure on the Okanagan market.
Like that battery-marketing bunny, the leaky condo crisis keeps going and going.
Owners in a 71-unit building in Cloverdale say their builder repaired some leak problems a few years ago. At the time, the work was covered by warranty.
But recent testing found moisture in the building’s walls, and homeowners learned that they would be hit with a bill of about $45,000.
For some owners, that was too much to handle, and they just walked away. Eight owners have yet to come up with the necessary cash.
“They’re going to be foreclosing. I have until the end of December to come up with any monies,” owner Shirley Hall said. “I guess I have to walk away from it.”
The building was built in the 90s, at the height of the leaky condo crisis. For 11 years, the province gave interest-free loans to those facing massive repair bills.
A 2008 report done for the government said that after 2012, anywhere from 14,000 to 24,000 leaky condos would still near repairs, and that the demand for loans would be high until 2017.
..but as you all know, that interest free leaky condo repair loan program has been axed. Housing minister Rich Coleman suggests taking out equity to pay for repairs saying “Even seniors can get reverse mortgages — they’re pretty economical”.
Hat-tip to Bizznitch for the link.
