Category Archives: prices

Summer sales fail on a streak

According to Paulb tuesday saw only 66 properties sold in Vancouver.

VHB says that makes a record 11 days in a row with double digit sales.

We haven’t broken more than 100 sales in a day for more than two weeks.

As VHB points out:

I have PaulB’s daily numbers for 2010 to now. The current streak of 11 straight double digit sales days is now a record.

You might think you could see this kind of streak in December or January. But August? This is nutty low sales.

Yesterday was Wednesday and we saw 71 sales.  That means we’re now on the 12th day of an unbroken chain.

Even if this record holds up through the end of the month it will likely be broken on Tuesday as sales made over the long weekend will add two days into one.

But what we also might expect to see next week is a flood of listings.  Here’s VHB again:

In past years, the September listings surge begins precisely on the Tuesday right after Labour Day. Last year, we had 356 listings on that Tuesday. In 2010, it was 282.

So, it would be a surprise if there are fewer than 1000 new listings hitting the books during the four days next week. Good chance to get over 1200.

And finally ZRH2YVR left a wrap up of what this market is looking like in a few select areas. We’re approaching a MOI of 20 (!) in some areas:

1.) SFH in West Vancouver will end the month with approx 1 sale per day. Down 50% from last month and down 70% from last year. MOI will now be over 20 and up from 5 last year. Inventory is near record at 530 units.

2.) Richmond SFH. July repeat. Same sales level, same inventory. I would say prices have to be down. MOI close to 20. The month had a blip in the first half with the first 10 sales days coming at 33 sales but the next 10 days being 21 sales. Quite a different second half.

3.) Van-West Attached (Appartment/Townhouse). This is a big big market so it’s tough to have it stop completely. It is the centre of the uninformed buyer especially young people with parents money. This month will be 15% below last month, 30% below last year and pretty much on par with 2008. Many sources have indicated prices are down but maybe about 5%. So many units are available. MOI in this large market will end the month close to 9, up from 5 last year and 8 last month. The sales pace in first 10 days and second 10 days were constant.

Read his full comment for the low down on other areas including East Van, North Van and Burnaby.

Housing Affordability deteriorates to new low

Thank goodness we don’t have a housing bubble in Vancouver!

Otherwise one might start to worry about these latest numbers on housing affordability.

The housing affordability index takes local family income and then looks at what percent of it would would be required to service the debt on an average benchmark bungalow.

The entire province of BC is at 69.7% and blows away the rest of Canada for overpriced houses. Only Ontario starts to come close with an affordability index of 43.9%. Even Toronto can’t compete in the overvalued housing arena, coming in at 54.5%.

According to RBC Vancouver is the champion of overpriced houses. To buy the benchmark bungalow here it would take 91% of a local families pre-tax income to service the debt.

From Macleans magazine:

Nothing, of course, could persuade condo king Bob Rennie that the Vancouver housing market is in a bubble (or, worse yet, a bubble that’s starting to let the air out).

For everyone else, take a look at this chart RBC put out today with its latest survey of housing affordability in Canada (which is deteriorating in most provinces, by the way)

No problem, just arbitrarily knock 20% off those Vancouver numbers and we’re not much worse than Toronto.

If you look around the world, you may be able to find a few markets that have an even worse affordability index than Vancouver, with lower incomes or higher house prices. But for some reason, most of those places seem to be able to pull in higher rents than Vancouver.

Time to cut our losses on Olympic Village?

The City of Vancouver still owes lots of money for the Olympic Village condo development.

They aren’t saying how much but it looks like it’s currently at least a couple hundred million.

Is it time to cut our losses?

Developer Michael Geller thinks so. In this Province article he says it’s time to cut the prices and get out while we can.

As Vancouver’s real estate market cools, losses on the troubled Olympic Village development could soar above $225-million unless condo king Bob Rennie quickly drops prices on unsold units that have languished on the market for too long.

That’s the view of developer and architect Michael Geller, a former NPA council candidate, who suggests flawed pricing and weak marketing is turning the fiasco on False Creek from bad to worse.

Read the full article here.

What do you think? Does the city stand to lose more by holding out for ‘maximum price’ or by selling quickly at a discount?

Village starts to dig itself out of hole

Good news! Now that shops and restaurants have opened up in the former Millennium Water Olympic Village housing development it’s no longer the creepy ghost town in the middle of the city!

Not only are there signs of life down there, the city actually looks like they’re starting to shrink the big ball of debts they acquired when they took responsibility for the project.

This progress is hard won and comes thanks to a number of efforts including:

-The city lowered property tax for businesses
-In February 2011 prices were dropped 30%
-In August an additional $5k in incentives offered to buyers

The city isn’t saying how much they still owe on the village, but the debt at the end of 2011 was $462 million.  Most of the extra expenses are from repairs for building deficiencies and marketing costs.

It looks like there is now just over 25% of the condo stock that remains unsold, but the receiver has put a block of rental units up for sale.  The buyer will be required to maintain those units as rentals for 20 years.

“The purpose and benefit of the sale of the rental buildings is to generate cash to repay the loan payable to the secured lender [the City of Vancouver],” said a statement from Ernst & Young. “It is particularly advantageous to undertake such now while interest rates remain low, the rental buildings at The Village on False Creek are fully leased and there remains an active pool of potential and interested buyers.”

The receiver also got permission from the court to put the project into bankruptcy, if needed, a move that it says is not being contemplated right now but “gives … the flexibility to consider the option of generating value from SEFC’s operating tax losses.”

Read the full article in the Globe and Mail.

Vancouver is dragging the Canadian market down

Yeah, sales are down across Canada and prices as well.

Average prices across the nation dropped 2% in July on a Year over Year basis.

But it’s really not as bad as it sounds.

That national average is mostly being dragged down by Vancouver where average prices fell 12.2% in July according to the CREA.

So mostly it’s the Vancouver real estate market where prices shot through the roof and are now falling back to earth that is dragging down the national average.

No Canadian real estate market crash yet.