Category Archives: data

Home and Condo sales battle map

VMD has been busy over at the new Vancouver Peak Forum uploading new Battle of Vancouver maps.

These maps show the increase or decline in year-over-year REBGV home price index (The Benchmark or HPI).

There are maps for both the condo market and for single family homes in the lower mainland, along with a few historical maps for comparison.

Here’s the map for SFH, showing big changes in South Surrey and UBC:

Battle_of_GV_SFH_2012_12_arrow

And here’s the map for Condos, which looks similar but the big changes are in South Surrey but Bull forces are firmly entrenched in Guilford and Pitt Meadows.

Battle_of_GV_Condo_2012_12

 

Here’s the original discussion thread for the Condo map and for the SFH map.

You can find more great creations and analysis from VMD over at greaterfoolvancouver.

Soft Landing Achieved!

Good news! Despite all the fearmongering, gloom and forecasts of dismay for the Canadian housing market we can now happily report that our market has achieved what the US housing bubble could not – A SOFT LANDING!

“Despite the klieg-light focus on the Canadian housing market this year, its performance has been far from exciting,” said Mr. Porter.

“It increasingly looks like most major markets are indeed undergoing a policy-induced correction. But, for now, the landing looks to be soft in most cities (with some cities actually still lifting off), with the rather obvious exception of Vancouver.”

As Mr. Porter added in an interview, “I don’t think you can call what’s going on in Vancouver a soft landing anymore.”

.. A bumpy landing then?

Read the full article over at the Globe and Mail.

Is the boomer wave crashing?

Pacifica Partners has released a new report on the housing market and there’s a write up over at the Globe and Mail.

Anyone still think the housing market’s going to snap back from the weakening trend that has taken hold in the past couple of months? It’s not, so act accordingly. Adjusting our expectations about housing won’t be easy because we’ve seen prices rise dramatically. Canadian Real Estate Association numbers show an average annual price gain of 7.7 per cent over the past 10 years on a national basis.

Aman Bhangu, Pacifica’s vice-president of research, said real estate has performed a lot like stocks did before the twin stock market crashes of the past decade. “At the end of the 1980s and 1990s, you had that mantra of ‘buy and hold, stock markets always go up, just get in there.’ It’s likewise with real estate – ‘real estate always goes up.’”

Mr. Bhangu said that taking a fresh look at the fundamentals supporting the real estate sector suggests prices are overvalued today by one-third, while other estimates call for a price decline of 10 to 25 per cent from current levels. Forecasts like these are educated guesses, whereas the demographic impact on housing is rooted in basic numbers.

It’s worth reading both the original report in full, there’s lots of interesting graphs there.

November 2012 stats – prices keep sliding

The following is a release from the GVREB which should not be confused with the Real Estate Board of Greater Vancouver (REBGV). This is what the GVREB says about itself:

“GVREB is a not for profit real estate bulletin prepared by industry analysts and market participants. Comments, information and questions can be sent to the general e-mail box at gvreb1@gmail.com”

Here’s their report on the market at the end of November 2012:

Firm trend of lower prices in Greater Vancouver as demographic changes bring motivated sellers to market
FOR IMMEDIATE RELEASE ON VCI

VANCOUVER, B.C. –December 3, 2012 – The pace of property sales slowed in November 2012 from October 2012 to be the second slowest month of November in the past 12 years. The slower selling pace combined with higher inventory levels continues to put downward pressures on home prices. In addition, the leading edge of a demographic change is appearing where aging home owners are selling their long-held principal residences in order to downsize in their retirement years. In certain higher priced markets, we are seeing older-aged sellers accept significant discounts on their asking price to complete their sale transactions. This is putting additional downward pressure on prices and setting the clearing price of the market lower. We foresee continued market weakness with no positive changes in macroeconomic factors expected in the next 18 months.

GVREB reports that residential property sales of detached, attached and apartment properties fell to 1,698 in November 2012, the second lowest total for the month of November in the past 12 years. This total represents a 28 per cent decrease compared to the 2,360 sales in November 2011. Contrary to mid-year predictions from local real estate market associations, the second half of 2012 has not resulted in an increase in sales from the first half but instead has continued to deteriorate.

November 2012 had a modest deterioration in sales pace which resulted in a seasonally unusual increase in the number of months of inventory. Prices also continued their downward trend with market-wide benchmark prices now down approximately 5% from their peaks in May 2012. With slow sales and high inventory, lower prices are now being set by the motivated and aging owners who desire or require their property to sell. These unlevered sellers are willing to accept very large discounts below their asking price in order to realize the large gains they have realized over their original purchase price. We believe this the front edge of a demographic trend that economists have predicted would occur.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 2,750 in November 2012. This was more than 10 per cent below the seasonal average and 15 per cent below the 3,222 listings in November 2011. However, as sales have slowed more than listings, the sales to new listing ratio of 62.0% was the second lowest for the month of November in the past 12 years. The number of active listings at the end of November 2012 was 15,680. Inventory decreased approximately 10 per cent compared to the end of October 2012 while MOI increased to 9.2.

The Residential Reference Price for all residential properties in Greater Vancouver over the last 12 months decreased by 1.2 per cent to $600,200 in November 2012 from $607,200 in October 2011. From the peak price level in May 2012, prices have now decreased approximately 5 per cent in those 6 months.

Sales of detached properties in November slowed to 637 units, a decrease of 30 per cent from the 916 detached sales recorded in November 2011, and a 39 per cent decrease from the 1,050 units sold in November 2010. On a monthly basis, the number of sales November 2012 was down almost 20 per cent from October 2012 and fell at a rate much higher than that of the attached and apartment segments. The reference price for detached properties fell to $916,000 compared to $936,200 in November 2011.

Sales of apartment properties fell to 752 units in November 2012, a 25 per cent decrease compared to the 1,000 sales in November 2011, and a decrease of 28 per cent compared to the 1,052 sales in November 2010. In the past 12 months, the reference price of an apartment property decreased by 2.2 per cent to $362,500 from $368,600.

Attached property sales in November 2012 totalled 309, a 30 per cent decrease compared to the 444 sales in November 2011, and a 24 per cent decrease from the 407 attached properties sold in November 2010. The reference price of an attached unit decreased 3.1 per cent from October 2011 to $459,000.

Government meddling hurts first time buyers

Peter Simpson is the former president and CEO of the Greater Vancouver Home Builders Association and he’s got a column in the Vancouver Sun that strings together some numbers and anecdotes and then blames the federal government for hurting affordability.

Since this column is about first-time homebuyers, I must comment on federal Finance Minister Jim Flaherty’s changes to the rules governing federally insured residential mortgages, including a reduction in the maximum amortization period from 30 to 25 years.

It is not clear that a tightening of mortgage rules helped Canadians to manage their debt. What is clear is that the shorter amortization period has reduced housing demand by eroding affordability.

Now of course this ‘reduction’ in the maximum amortization period is actually just a reset to a historical norm, not to mention that it only applies to government insured loans.

Mr. Simpson refers to an older generation with homes that are paid off, but I can guarantee you that those homes were not bought on a 30 year amortization, so did longer morts help or hurt affordability? Is it possible that pushing more money into the housing market simply helped to drive up prices and worsen affordability?

It may be that Mr. Simpson is not primarily concerned with the well being of the first time buyer, but is instead concerned with a reduction of customers for his industry.

His conclusion is especially telling:

Finally, Vancouver-area pundits predict there is a sales shift to moderately priced homes, and a buyers’ market will continue until mid-2013. There is no assurance interest rates will remain low through 2013. The bottom line is it seems to be a good time to consider buying a new home.

Read the full thing over at the Vancouver Sun.