Vancouver Condo Info » other provinces

It feels so normal here

patriotz — Tue, 08 Nov 2011 14:25:33 +0000

Another warm sunny day in Ottawa. Here’s what I get for having given up on the “best place on earth”:

- more cultural activities
- people who are polite and say hi to you on the street
- neighbourhoods that feel like neighbourhoods
- ethnic diversity but not segregation
- no homeless people outside of downtown
- breakins are regarded as newsworthy
- much better job opportunities

I can break the RE market into three sectors:

- Gatineau, Quebec
Prices that are actually reasonable. $200K gets you this in the English-speaking community of Aylmer:

http://passerelle.centris.ca

- Generic Ottawa
Overpriced but if you really want to buy, you won’t become a debt slave. $300K gets you this in Silicon Valley North:

http://www.realtor.ca

- Trendy Ottawa
Definite bubble territory, but still more for your money than Vancouver. This $1.2 mil house in the Glebe likely would not rent for more than $3500/month:

http://www.realtor.ca

Compare with this rental:

http://ottawa.en.craigslist.ca

Or you can rent, there’s lot of quality stock, the landlords aren’t psychos and people don’t treat you like a leper.

Enjoy the rain.

This post was submitted by patriotz.

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Alberta leads the way on delinquincies

TKO — Thu, 05 May 2011 08:06:52 +0000

Huh. Even with high oil prices and rock bottom rates homeowners in Alberta don’t seem to all be paying their bills on time:

Homeowners in the province are nearly twice as likely to fall behind than those in the rest of Canada. And the proportion struggling to make mortgage payments is the highest it has been since at least 1990, according to fresh data from the Canadian Bankers Association.

The rising rate of delinquency comes as economists warn that Canadians are under increasing pressure when it comes to servicing their debts.

As interest rates move higher in the coming months, many could find it even harder to make their monthly payments.

The main problem for the province has been Calgary’s housing market, which has struggled since a boom at the start of the decade caused massive price gains in a short period. In 2005, prices were up 10 per cent. The following year, home prices surged another 50 per cent.

The gains came to a halt five years ago, when the market began to weaken. Then, when the recession hit in 2008, panicked homeowners rushed to sell in near-record numbers, flooding the market with inventory and putting renewed pressure on prices.

This issue also seems to be negatively affecting Genworth.

This post was submitted by TKO.

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Open political thread

The Pope — Mon, 04 Apr 2011 15:34:31 +0000

Alright, let’s talk politics. Who do you think will best guide the economy through any future troubles and which party will best handle the housing market from your point of view? Is that the same party you normally vote for?

This is the thread to tell us who your voting for and why, or who your voting against.

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CREA wants federal government out of mortgage market

The Pope — Wed, 16 Feb 2011 10:36:20 +0000

..Ok, that’s not actually true, the Canadian Real Estate Association is actually just urging the federal government to leave everything as status quo so they can sell lots of houses, but it’s fun to imagine the first paragraph of this Globe and Mail article is meant to be taken literally:

The Canadian Real Estate Association has cautioned the federal government to stay out of the mortgage market until the effects of recent changes can be gauged, as it suggested buyers are racing to secure 35-year mortgages before they are banned in late March.

Imagine the mayhem that would be unleashed upon the Canadian housing market if the government via the CMHC ‘stayed out of the mortgage market’. The end of that sentence is also completely inaccurate, as 35-year mortgages obviously aren’t going to be ‘banned’ in late March, they simply won’t be eligible for tax-payer backed mortgage insurance anymore.

As Paulb points out, the remarkable thing about that article is the comments. Twelve hours after being published there are close to 300 comments, most of them unhappy with the CREA and the CMHC.

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What does your MP think?

The Pope — Mon, 10 Jan 2011 09:32:04 +0000

As you’ve probably heard, the Canadian Real Estate Association is asking it’s 100,000 plus members to send in a form letter to their MPs in reaction to rumored changes to mortgage finance rules. In the form letter they say:

In particular, we are concerned about the negative impact modifications to the allowable amortization period or minimum down payment requirements would have. These changes would create affordability problems, especially for first-time buyers. First-time buyers are the first link in a chain reaction of real estate activity.

But let’s be clear – the ‘allowable amortization period or minimum down payment requirements’ are not proposed rules that will prevent private lenders from offering any deal they want, they are a reduction of excess government credit pumped into the housing market over the last few years. What the CREA seems to be proposing is the conflicted idea that our housing market is stable and not in a bubble, but that minor changes to down payments or amortization terms on government insured mortgages could cause a collapse (of that non-existent bubble).

Also from the CREA form letter is this justification:

The housing sector played a key role in Canada’s economic recovery. In fact, a report published by Altus Group in 2009 found the typical MLS® home sale and purchase between 2006 and 2008 produced $46,400 in spin-off spending. Based on this research, forecast annual sales in 2010 generated an estimated $20.5 billion in spin-off economic activity and over 185,000 jobs.

Sounds like a good spin off, but according to this article in the CBC, the issuance of CMHC mortgage backed securities in 2010 is estimated to be $100 billion. Are we really getting the best sustainable economic spin off from that money?

For all the CREA claims to care about first time buyers, they are who would be most protected by adjustments to government backed mortgages. If you can’t afford a down payment right now maybe you shouldn’t be buying. As we’ve seen all around the world from the US to Dubai to Ireland, Spain and Portugal, rocketing property values without income growth is not sustainable, no matter how much governments or real estate associations would like them to be.

This is a small local blog, we get less than 4000 readers a day which is far less than the CREA’s 100,000 plus members, but that doesn’t mean your voice shouldn’t be heard. If you want to make your views known to your MP you are welcome to use this form letter written by Jesse in the forums. You can find contact info for your MP here.

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Canada’s coming housing bust

The Pope — Mon, 15 Nov 2010 08:04:02 +0000

Many people have pointed out this link: Fortune Magazine on the likelihood of a major Canadian housing market crash:

Canadians easily obtained mortgages with only 5% down and payments running out 35 years. More than 65% of Canadian mortgages are fixed for five years (and now face more stringent renewal terms and likely higher interest payments). But variable rate mortgages offered in Canada were at least as creative as those doled out in the US, with banks allowing terms as short as six months. Unlike in the US, people who default on mortgages in Canada don’t just lose their houses, they risk other assets as well.

A fast or unexpected rise in interest rates (Canada was the first G7 country to begin moving them higher following the recession) could leave Canadians with little cushion. Last year the IMF noted that, by some measures, Canadians were paying a larger percentage of their income for housing than Americans did prior to the housing bust.

That level hasn’t improved. Recent government data shows that the average Canadian with a two-story home spends almost 50% of his household income on mortgage servicing, with the average is closer to 70% in red-hot markets like Vancouver. “By and large the affordability situation remains within a safe range in Canada; however there are local markets where the share of household income taken up by homeownership costs is at worrisome levels,” the Royal Bank of Canada wrote in September, adding that the situation in Vancouver raises “a red flag.”

Timely warning or sour grapes because our housing market is strong while the US market sags? You can read the full article here an make up your own mind..

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Real Estate overpriced, Carney contemplates collapse

The Pope — Wed, 27 Oct 2010 08:22:30 +0000

Commenter painted turtle pointed out a couple of interesting news items. First off, a survey by The Economist shows Canadian real estate overpriced by 23.9%, which is high, but not as high as Australia, Hong Kong and France.

“Singapore, Hong Kong and Australia boast the gaudiest year-on-year price increases, even if the rate of appreciation is down a bit from the summer,” the report states. “House prices in China rose by 9.1 per cent in the year to September, compared with a 12.4 per cent rise in May.”

The Economist’s analysis of “fair value” of housing is based on comparing the ratio of current house prices to rents, with the long term average.

Simply put, the purchase price of a house is divided by the rent it could have earned per year, and the result is the price-to-rents ratio.

A high result could mean a house is overvalued, while a low number means it could be undervalued.

You can see the list over at CTV.

Averaging home prices across an entire country must be kind of tricky though. Especially in a country as big as Canada there’s a big difference between the market in Vancouver and Windsor.

All this talk of overpriced real estate must be getting to Mark Carney, because the Bank of Canada governor just said out loud that an abrupt correction in Canadian house prices is a possibility:

Bank of Canada governor Mark Carney agreed Tuesday that an abrupt correction in Canada’s housing market is possible.

Appearing before the Commons finance committee and responding to a question from Nova Scotia MP Scott Bryson, Carney said he was not predicting a significant drop in prices, but given how far prices have risen and the high level of Canadians’ household debt, it could not be ruled out.

Carney told the committee the bank is limited in what it can do to use interest rate changes to encourage Canadians to reduce their debt.

Read the full article over at the CBC.

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End of the Canadian RE bull market

The Pope — Mon, 09 Aug 2010 09:04:50 +0000

ReadytoPop posted a link to this Financial Post article that portrays what it looks like when a real estate bet turns bad:

Erica and Jeff Manger never thought the price of their house could drop.

The Alberta couple bought a condominium in the Rockies resort town of Canmore three years ago and when they decided to move in 2008 to Sylvan Lake in Alberta, where they could afford a detached home, they kept the condo as an investment.

“It never occurred to us that we wouldn’t be able to sell for what we paid,” says Ms. Manger. “People were making $100,000 [on paper] a year on their condos.”

Now they’d be lucky to get the $315,000 they paid for their condo, even though it may have fetched $345,000 in 2008 when they were thinking about selling it to help pay for their new home. Instead, they’re getting $1,100 a month in rent for an investment that costs them $1,800 a month to carry and isn’t going up in value.

It gets worse. They have to sell the house in Sylvan Lake because Jeff, who is a helicopter pilot, is looking for a better location for work. They paid $375,000 for the house and fixed it up. Not even counting Jeff’s labour, the couple spent another $30,000 on supplies.

“We tried to sell it and put it up for $409,000. We lowered it to $385,000 when we hired a realtor, but that didn’t work,” says Ms. Manger.

Read the full article over at the Financial Post

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Treasure trove of mortgage data

The Pope — Mon, 19 Jul 2010 09:27:06 +0000

VHB pointed out this site on Thursday: Canequity provides actual data for their mortgages across Canada including here in Vancouver. One of the frustrations of anyone trying to study the housing market in Canada is the dearth of publicly available data compared to the United States, so it’s nice to find a source of some data when it comes to Canadian mortgages. Here’s their chart of product inquiries as one example:

Take a look through all the data they make available – here’s Toronto and here’s Alberta. Locally there’s info for BC and Vancouver. If anyone wants to do a breakdown of anything interesting that they find, we’ll be happy to publish that here.

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Royal LePage predicts falling prices

The Pope — Wed, 07 Jul 2010 15:27:03 +0000

realpaul pointed out this Vancouver Sun article. The day after we got the news that house prices are falling in Vancouver, Royal LePage has released a market survey predicting house prices and sales will ‘decline towards the end of the year’.

However, he pointed out, “This should not be interpreted as a severe correction but rather a natural reaction to the market having peaked quite early this year.”

This outlook is at odds with the BCREA and CREA market surveys released a few weeks ago that predict flat or rising prices for 2010 and then falling prices in 2011.

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Household debt levels threaten recovery

The Pope — Thu, 27 May 2010 08:01:06 +0000

Household debt levels in Canada are at record levels, higher than Greece. The Canadian reaction to recession has been to take on more debt, which has some worried about the impact that will have on our economy going forward.

Household debt has more than doubled from 1989 levels and now stands at a record $1-trillion – or $1.47 for every dollar of disposable income. With the Bank of Canada expected to raise interest rates, perhaps as early as next week, vulnerable Canadians could soon find themselves emptying their pockets to cover higher interest payments.

“The high rate of household indebtedness is a source of risk” to the Canadian economy, the Organization for Economic Co-operation and Development cautioned in a report Wednesday. It noted that household debt has swelled further in recent months – an unusual development. People usually save during recessions.

Read the full article in the Globe and Mail.

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The ‘good banks’ myth

The Pope — Mon, 24 May 2010 16:58:15 +0000

Observer pointed out this blog article over at the Vancouver Sun, which does an excellent job of rounding up some of the issues we’ve gone over about the CMHC and the Canadian Banking system:

Not only has the Harper government felt it necessary to prop up Canadian banks it was this same government which created financial system risk in the first place. In 2007 the Harper government allowed US competition into Canada which prompted the CMHC to dramatically change its rules in order to compete: it dropped the down payment requirement to zero per cent and extended the amortization period to 40 years. In August 2008 Flaherty moderated those rules in response to the US mortgage meltdown. CMHC then “securitized” an increasing number of its loans into bond-like investments (if you have a typical Canadian mutual fund, you’ve got some.)

At the end of 2007 there were $138 billion in securitized pools outstanding and guaranteed by CMHC –17.8 per cent of all outstanding mortgages. By June 30, 2009, that figure was $290 billion and by the end of 2010 it was $500 billion.

Read the full article, it’s full of interesting facts and figures.

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BMO suing over huge mortgage fraud

The Pope — Wed, 05 May 2010 08:32:20 +0000

The CBC is reporting that the Bank of Montreal is suing hundreds of people in Alberta over alleged mortgage fraud that falsely inflated the value of many properties. They’re suing lawyers, mortgage brokers and four of their own employees and claiming a loss of up to 30 million dollars.

Other banks don’t appear to be as aggressive in their approach, even though documents indicate they may have been targeted too. Bank of Montreal investigators found documents that showed one Calgary management company had 150 suspect mortgages from 16 different financial institutions.

Rosen said this alleged fraud illustrates how weak and ineffective the controls are in our banking system.

“To me the most exasperating part of our business is we are not doing what we are supposed to be doing,” he said. “We are kidding ourselves that we have good systems, because we don’t.”

A number of these fraud cases showed up in the US as prices declined, funny how they didn’t seem to show up as prices were rising. Read the full article over at the CBC.

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USA bubble peak vs. Canada today

The Pope — Mon, 03 May 2010 09:56:11 +0000

Vibe posted an interesting comparison of the 2006 US bubble peak to the present day Canadian situation in the forums this weekend. The local Vancouver market is bubblicious, but is there a national Canadian housing bubble?

Everyone pretty much agrees about Vancouver, but here are a couple of points that were made about the national scene:

1.It is reasonable to claim that there is not a housing bubble in Canada because only certain areas are over inflated.

2.Vancouver’s very high prices skew the national average and cause Canada to look worse than it really is.

One thing I think we can all agree on is that the US did have a housing bubble. Well I put together a spreadsheet that I feel shows that affordability is about as bad across Canada as it was in the US at their peak. It also shows that Vancouver is not skewing our national data any more than the most overpriced cities in the US were skewing their data.

In order to measure affordability I used house price to personal income ratios. I compared the 20 cities used in the Case Shiller Housing Index to the 6 cities used in the Teranet Housing Index. The US data is from 2006 while the Canadian data is from 2009.

I think the following graph most clearly illustrates my point:

Vancouver is the only Canadian city with a ratio over 9, while the US had 3: LA, San Fran and San Diego. Toronto is the only Canadian city with a ratio between 5 and 9, the US had 9 in this range. The under 5 range looks bigger for Canada but we have more population covered by our index than they do by theirs. The important thing is that the percentage of each nations population living in cities with elevated ratios is similar.

The distribution and average ratios for both countries are almost identical. I did a population weighted average of the ratios and this gave a higher value for the US than Canada, 6.3 versus 5.6. Keeping in mind that the Canadian data comes from 3rd quarter 2009, during our recent price dip, I don’t think this is a huge difference.

Now I don’t know what the future holds, but to me this data suggest we are in a very similar situation to the US at their peak. We might not take the same path down (we already had a double top) but I don’t see why our eventual bottom should be much, if any, higher than theirs. And any price drops should be distributed across the nation in a similar fashion as well.

Here is a link to the data for anyone interested.

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CREA to vote on changes today

The Pope — Mon, 22 Mar 2010 14:56:10 +0000

The Canadian Real Estate Association is set to vote today on proposed changes to the rules governing use of the MLS after pressure from the Competition Bureau.

The rule change could remove the requirement that a realtor act as agent for the seller “throughout the entire time” of a listing contract, making it possible for agents to post property information through the MLS without providing more service.

..meaning that a realtor would be able to charge a flat rate for simply listing a property and not be involved in the rest of the sale.

UPDATE: The CREA has voted for the new changes and the Competition Bureau has said it’s not enough:

“There is nothing in these proposals that we haven’t seen before and they do not solve the problem,” said Melanie Aitken, Commissioner of Competition. “They are a step in the wrong direction. These amendments amount to a blank cheque allowing CREA and its members to create rules that could have even greater anti-competitive consequences.”

The two sides have been battling over access to the Multiple Listing Service system, which is owned in Canada by CREA and responsible for about 90 per cent of residential property sales.

The watchdog says the association’s new measures, which ultimately give consumers some ability to decide how much they use a Realtor on a deal and allow consumers to conduct parts of a transaction without using a Realtor, do not go far enough.

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Canada’s housing market cooling off

The Pope — Tue, 16 Mar 2010 04:42:43 +0000

The CREA says a cool-down in the national housing market is happening in advance of new mortgage rules set to come into effect April 19th. Here in BC there was a heavy drop in activity, partly offset by a Toronto market that’s still hopping. It will be interesting to see if this is a trend, or a blip caused by the winter games.

Meanwhile, the number of new listings — an indication that homeowners are looking to capitalize on demand — climbed 2.4 per cent, marking the fifth straight month that housing supply grew. The amount of housing inventory in February stood at 5.2 months, well below where it was a year ago, at 8.8 months, but on par with 2008 levels.

“Headline price increases are drawing new supply to the market, and so that’s taking some steam out of the market,” said Gregory Klump, CREA’s chief economist.

The average price of all homes sold in February through the MLS system was $335,655, CREA said, up a robust 18.2 per cent from a year ago.

However, CREA said the gain was smaller than in the past four months — down from the January increase of 19.6 per cent — and future increases are expected to become “further subdued” in the months ahead.

“Time will tell how normal the market becomes, but I think there are pretty clear signs that some self-correcting mechanisms are starting to take over and lead to a calmer market, compared to what we saw in late 2009,” said Douglas Porter, deputy chief economist at BMO Capital Markets.

Joycer points out that RBC has also released their affordability report, you can read the PDF here. They make some comments specifically about the BC market:

While still below their recent cyclical peaks, all RBC measures stand well above long-term averages. Such poor affordability levels represent an element of risk that could weigh heavily on markets when interest rates start rising.

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Canada Housing bubble in the Wall Street Journal.

The Pope — Tue, 09 Feb 2010 08:07:25 +0000

I think Domus was the first to point out this article in the Wall Street Journal - it looks like the Canadian Housing Bubble is getting some attention in the US media.

But some economists who are concerned point out that home prices are rising far faster than other measures of economic health. The 2009 price increase of more than 20% came as personal income in Canada fell nearly 1% and total employment was 1.4% lower than the year earlier. In a December report, the Bank of Canada warned that household debt—largely mortgages—was 1.42 times disposable income during the second quarter of 2009, a record high.

Another possible danger: Because Canadian banks typically reset adjustable-rate mortgages every few years, those who are buying now at low rates will likely see increases soon. Toronto-Dominion Bank forecasts suggest that the rate to which many Canadian mortgages are pegged, the prime rate, could nearly double by the end of 2011. The Bank of Canada warned in its December report that if interest rates increase as expected, by mid-2012 about 9% of Canadian households could have so much debt that they’d be “financially vulnerable.”

“This is exactly what happened in the U.S., when affordability had moved way out of whack with prices,” says David Rosenberg, an economist who witnessed America’s housing bubble at Merrill Lynch in New York, and now sees similar trends up north from his post at Toronto-based wealth-management firm Gluskin Sheff.

Reading the article it quickly becomes apparent that Canada = Toronto (with a dash of Red Deer). So we finally get some mainstream media coverage and there isn’t a single mention of the Vancouver market in there. What are we, chopped liver?

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At home in the tulip patch

The Pope — Thu, 21 Jan 2010 12:15:24 +0000

Don sent in a link to this interesting editorial on Canadian housing bubbles and the CMHC in the Winnipeg Free Press. The author does a good job of touching on the background of bubble mentality, including the classic Dutch tulip bubble. They then talk about the US housing bubble and compare it to the Canadian market.

Millions in the United States are homeless as a result of the subprime mortgage debacle, which had the effect of vastly inflating both the seeming buying power of consumers and seeming value of houses.

In short, Americans were getting credit at rates so low that they could buy way more house than they could afford if credit charges increased, which they did.

We don’t have a subprime problem here, so we won’t have a real-estate bubble, we are told.

In fact, just this week, Bank of Canada officials were assuring everyone that steep increases in house prices are the “natural” consequence of pent up demand during the recent trough, which also had the effect of suppressing prices so that surging prices now appear to be surging faster than they are.

Now, I’m no expert and I’m inclined to believe what the experts tell me.

But I also hear opinions of people in the property racket who aren’t so sure. And their concern is not so much that Winnipeg house prices have climbed 78 per cent in the past four years, as the new reassessment reveals. Or that there are stories about house hunters sleeping in the streets of Vancouver in hopes of snapping up a $1-million house that we would pay no more than $350,000 for.

No, their concern is that low interest rates and long-term amortization periods are making it easy to get into the market — maybe too easy. But more concerning is that all this demand is being insured by the Canadian Mortgage and Housing Corp.

ahh, yes, the good old CMHC. So what could be the problem of the CMHC insuring demand for Canadian houses?

As the financial crisis started to hit in 2008, the federal government increased the ceiling of mortgage insurance CMHC can have outstanding — from $350 billion to $450 billion, and then $600 billion.

The move is widely regarded as a key measure that helped prevent the kind of credit crunch that so hurt the United States. And just about everyone who has commented on the changes, including Liberal finance critic and former bank president John McCallum, are cool with that.

But my sources wonder if CMHC, which insured 920,000 housing units in 2008, 350,000 more than it intended, according to the Globe and Mail, was in a position to ramp up its due diligence as fast as it ramped up its underwriting.

It’s a good question because, if there is a bubble, Canadian taxpayers will be on the hook for all the paper.

The full article can be found here and is a good read.

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Ottawa probes mortgage brokerages

The Pope — Tue, 01 Sep 2009 11:23:26 +0000

Ottawa is looking into mortgage brokerages, not to make sure they’re lending responsibly, but to make sure they’re protecting personal information.

The audit, which industry sources say began this month, is looking into the potential misuse of consumers’ information to carry out fraud such as identity theft. It’s an issue that carries added significance in the wake of the U.S. subprime mortgage crisis, because mortgage brokers and lenders are now being pushed to request even more information and documentation from borrowers.

“The reason that we are doing this is we have been concerned that personal financial information of Canadians might have been falling into the wrong hands,” said Anne-Marie Hayden, a spokeswoman for the privacy commissioner’s office.

“There have been numerous breaches reported to our office over the course of the last year or so.”

Ms. Hayden stressed that the audit is still in the preliminary stages, and it is too early to say what practices within the industry it might uncover.

Have you applied for a mortgage recently? Are you aware of the privacy policy for the mortgage brokerage you applied with and do you feel comfortable giving them your personal info? Apparently there’s no law that brokerages have to disclose when a breach has occured.

“There is tremendous fraud going on in the broker industry,” said Alex Haditaghi, chief executive of Mortgagebrokers.com, a Toronto-area mortgage broker. The privacy commissioner’s probe is “much needed,” he added.

Mr. Haditaghi said his firm carries out credit checks and criminal record checks on brokers before they join the company, and has put a privacy policy in place.

The Financial Services Commission of Ontario, which is responsible for the oversight of mortgage brokers in that province, recently issued a warning to the industry that it has “received a number of complaints from mortgage brokerages regarding fraudulent activities by their mortgage agents, who were fraudulently accessing clients’ credit information without proper authorization.

“The mortgage brokering industry’s reliance on personal information to complete mortgage transactions makes it a target for individuals who wish to gain access to personal information for the purpose of engaging in criminal activities.” Brokers are required to obtain the borrower’s consent to check their credit history.

An official at one mortgage brokerage said in an interview that a broker signed up with their firm and proceeded to carry out hundreds of credit checks in the span of 24 hours.

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Commercial real estate woes

The Pope — Tue, 18 Aug 2009 15:24:11 +0000

Residential real estate isn’t the only over-valued market, at least according to PriceWaterhouse Cooper who issued a report Monday for the Canadian commercial real estate market:

“We’re very pessimistic, and we think there are going to be big issues in the Canadian real estate market,” Holly Allen, managing director for PwC’s real estate practice in Canada said in an interview.

“We think there are going to be foreclosures and default situations on some of the buildings.”

Allen said Alberta is particularly vulnerable, due to an oversupply of product and weak demand driven by tumbling prices for natural gas, which represents a significant portion of the province’s energy industry.

The report blames scarce money — and therefore limited buyers — for the sector’s woes. As well, it said, investors’ appetite for commercial mortgage-backed securities has dried up.

“The credit crisis and ensuing recession have dragged commercial real estate markets into very trying times, marked by value losses, rising foreclosures, and reduced property revenues,” Frank Magliocco, leader of PwC’s real estate practice in Canada, said in the report.

We seem to be facing a pessimistic outlook in many sectors, yet residential real estate here in Vancouver has defied expectation and had a mini-bounce lately. Will the commercial sector likewise defy expectation?

Full article in the Vancouver Province.

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New home prices fall for 9th month

The Pope — Wed, 12 Aug 2009 15:24:23 +0000

We’ve now seen nine consecutive months of falling new home prices, mostly driven by the drop out here in the west. Despite predictions the drop was over, prices fell nationally in June by .2 percent on the month for a year over year drop of 3.3 percent. This is the sharpest national decline in new home prices since the early nineties.

The biggest drop in one month was right here in Vancouver where June saw a .9 percent drop in prices as builders tried to clear out inventory. Right now Saskatchewan, Alberta and British Columbia are driving prices down, while the east coast is pulling them up. St. Johns saw the largest yearly gains of 10.3 percent, while Vancouver is showing losses of 9.1 percent.

If you’re looking to buy a new condo, it’s probably a good time to haggle.

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Vancouver #1 in net worth

The Pope — Mon, 20 Jul 2009 17:39:41 +0000

According to a study released by Environics Analytics, Our fair city surpassed Calgary in 2008 when it comes to net worth. This is due to a number of factors, including increased household debt and rapidly dropping houseprices in Calgary compared to a slower drop in house prices here.

Net worth, which measures someone’s assets minus debts, dropped 6.2 per cent for Canadians as a whole last year. But Calgary residents saw their wealth plunge 12.3 per cent, while Vancouver’s residents were able to hang on to much of their riches. There, net worth fell just 3.1 per cent between December, 2007, and December, 2008.

Though house prices in both cities continue to drop, they are dropping faster in Calgary which makes the Vancouver numbers look better by comparison. The report draws no connection between an economy based primarily on a real estate and it’s risk for a downturn in net worth, though it does mention the local obsession:

Vancouverite Sebastian Albrecht rode that Pacific wave. He has a lot of his money tied up in real estate. And it’s these investments – with prices down less than 10 per cent from their peak last year – that has made the city surrounded by mountains and ocean the richest in Canada, supplanting the country’s energy capital Calgary.

Mr. Albrecht bought his first condo a decade ago, after university. He stretched himself – and slept in a sleeping bag on the floor for a couple months in the unfurnished home.

A decade later, he lives in a $600,000 home that he bought two years ago for $500,000 and also owns – and rents out – a $350,000 town home and a $300,000 condo. He has some money in stocks, but only about 10 per cent of his net worth.

The three leading provinces for net worth also lead for household debt levels: BC, Alberta and Ontario. Each province has it’s own particular challenges. Alberta has a boom and bust economy based on energy prices, Ontario has been hit hard by a manufacturing downturn and locally we’ve seen job losses in resources, tourism and the entertainment industries.

As the recession and real estate market correction grinds on it will be interesting to see where the stats put us in a year as the report points out that it’s only current up until the end of 2008:

The survey doesn’t cover 2009. In the first six months of this year, prices for existing homes were down 8.6 per cent in Vancouver from the same period of last year, and 9.8 per cent in Calgary, resale statistics show.

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Credit problems in Canada

The Pope — Tue, 07 Jul 2009 18:07:53 +0000

Mish Shedlock has an interesting post comparing the alarming jump in Canadian credit delinquency to the situation in the US. More than 500,000 Canadians are now at least 90 days behind on credit payments, hitting a delinquency rate of 1.52% (compared to a US rate of 1.32%).

The Federal Reserve Bank of New York has Dynamic Maps of Bank Card and Mortgage Delinquencies in the United States that some may wish to consider.

In regards to mortgages, Canada has some “catching down” to do, and it will. All the bubble areas such as Vancouver, Calgary, Toronto, etc are going to get hit hard.

Hat-tip to Adrian for the link.

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Paul of Green Gables

The Pope — Tue, 30 Jun 2009 21:51:01 +0000

Regular readers will recognize the name Paul Boenisch as the North Vancouver realtor who provided daily market stats on his blog. As many of you know, Paul and his family moved to to the other coast recently, and he now has a new blog focusing on the Prince Edward Island real estate market.

It’s an interesting contrast to our market- check out the average sales price chart he’s posted that covers the last four years. They started 2006 with an average residential sales price of $120k, and peaked just above $160k.

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Province: Vancouver prices up 16% YOY

The Pope — Wed, 17 Jun 2009 03:24:15 +0000

Here’s a fascinating bit of info for those of you that have been surprised by the spring bounce in the Vancouver real estate market. The Province is reporting that house prices in Vancouver have jumped an astounding 16% since last May!

..Or at least their headline is. Those that read the article may be dissapointed by the actual number:

The average house price for the city and surrounding area was $583,674, down 6.6 per cent from a year earlier.

Nationally, the housing market continued to rebound in May with a fourth consecutive increase in monthly sales, the association said. The Ottawa-based group said the average sale price of a home sold through the multiple listing service reached a record of $319,757.

That’s up 0.4 per cent from May 2008, when the previous record was set. The association said the market is now returning to what it called “pre-recession levels” of activity.

It’s a very bouncy spring bounce indeed.

Hat-tip to Beau for finding this gem.

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