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Average Canadian house price up 13% in April, but wide regional variances remain

Canada's housing market hit new all-time records both for the average price and the number of homes sold in April.

Canada’s housing market hit new all-time records both for the average price and the number of homes sold in April. (Associated Press)

The Canadian Real Estate Association says the average house price increased by more than 13 per cent in the year ended in April.

CREA has said for several months in a row that the average price is skewed higher by the hot and large markets of Toronto and Vancouver. Stripping those two cities out, the national average drops to $369,222 and the year-over-year gain is reduced to 8.7 per cent, CREA said.

CREA says the average figure is misleading, so it calculates something it calls the Aggregate Composite MLS House Price Index, and contends it’s a fairer representation of the real market, by blending together all housing types.

Even on that more normalizing scale, the CREA index rose 10.3 per cent in April, its biggest gain in almost six years stretching back to May 2010.

Here are the eye-popping numbers for some areas in and around Toronto and Vancouver:

The Greater Vancouver Area’s index increased by 25.3 per cent
The nearby Fraser Valley increased by 25.6 per cent
Prices in the GTA were up by 12.6 per cent
Victoria was up 12 per cent
Vancouver Island prices were up by 8.2 per cent.

By way of contrast, prices declined by 3.5 per cent and 2.4 per cent in Calgary and Saskatoon, respectively, which are smaller declines than those posted by these markets in March.

…click on the above link to read the rest of the article…

The “Unequivocally” Divided States Of Canadian Consumers

April 24, 2016

The “Unequivocally” Divided States Of Canadian Consumers

Canada has never been more divided. With Vancouver being taken over by the rich Chinese, and Calgary nearing depression, roles have been dramatically reversed across Canadian provinces as spending in non-energy-producing regions hits a record high relative spending in those dependent on oil…

Home prices show the divide between Canada’s haves and the have-nots… (as wealthy Chinese money floods into certain regions)…

But among average-joes, it seems pitifully low oil prices are unequivocally divisive across the nation…

Canada’s consumers are ramping up retail spending, but only those who reside in the non-energy-producing provinces. As Bloomberg reports, retail sales in Alberta, Newfoundland, and Saskatchewan fell 0.9% from a year earlier in February, while the rest of Canada saw spending rise 7.3%.

The divergence is at a record, with retail sales growth in non-energy provinces at least 8 percentage points higher than in energy provinces over the last six months, which is a reversal from the recent past: since the early 1990s, retail sales in the rest of Canada have averaged 1.6 percentage points below that of the oil-producing provinces.

We look forward to Mr.Trudeau’s policies to fix this ‘unequivocally’ unbalanced situation.

House affordability improving in some parts of Canada, National Bank says

April 20, 2016

House affordability improving in some parts of Canada, National Bank says

Mortgage rates probably won't be dramatically changed by the Bank of Canada's benchmark overnight rate, economists say.

Mortgage rates probably won’t be dramatically changed by the Bank of Canada’s benchmark overnight rate, economists say. (Sean Kilpatrick/Canadian Press)

Six of 10 markets surveyed showed improvement in affordability, the bank said, with the biggest improvements seen in Calgary, Montreal and Ottawa-Gatineau.

Pockets of affordability emerge

The bank’s gauge of affordability is the percentage of income required for a monthly mortgage payment on a median-priced home, assuming a 25-year amortization and a five-year term.

In Calgary, which has been hit hard by the dramatic drop in oil prices, the the mortgage payment stood at 28.2 per cent of income for the first quarter of this year. That was off by 0.7 percentage points from the last quarter of 2015, and down by 2.2 percentage points from the first three months of last year, the bank said.

‘Montreal homes have become the most affordable in a decade’– National Bank

In Montreal, the first quarter drop was 0.5 percentage points from the end of last year, the same decline seen in the Ottawa-Gatineau area.

“Montreal homes have become the most affordable in a decade,” National Bank economists Matthieu Arsenau and Kyle Dahms said in their report.

They also said Calgary’s percentage of income needed for a monthly payment is now at a record low.

Nationally, the portion of income increased by 0.1 percentage points to 31 per cent in the first three months of the year, the bank said. That followed a increase of 0.8 percentage points in the last three months of 2015.

Meanwhile, Vancouver and Toronto continue to see soaring prices, and eroding afforability, the bank said.

…click on the above link to read the rest of the article…

Vancouver, Toronto home buyers not ‘reckless,’ just numerous

March 31, 2016

Vancouver, Toronto home buyers not ‘reckless,’ just numerous

National Bank economist says household formation, not speculation, is driving up prices

National Bank economist says even Vancouver apartments may not be overvalued by world standards.

National Bank economist says even Vancouver apartments may not be overvalued by world standards. (Canadian Press)

Instead, the prices they face reflect the rapid growth of employment in both cities and the fact that the population of young people aged 20 to 44 is growing, he says in a new report.

Plenty of analysts are saying these markets are in bubble territory, and buyers risk losing their money. Some even say the markets are hot, because of Chinese buyers snapping up property as a safe investments. Marion dismisses these concerns.

It’s wrong to think the rapidly rising housing prices in these two markets are the result of speculation, he adds.

Instead, housing prices — which rose 27 per cent in the year to February in Vancouver and 11 per cent in the same period in Toronto — are being driven higher by an influx of people who are settling in the city.

“The working age population is growing about 70 per cent faster than the national average in Vancouver and Toronto on the back of strong inflows of highly educated immigrants who can more easily integrate into the job market,” he wrote in the report.

Marion argues that employment surged by 5.5 per cent in Toronto in 2015 and 4.4 per cent in Vancouver.

Underlying force

That helps attract people aged 20 to 44, the stage in life when people get jobs, put down roots and form households.

“The underlying force for housing demand is household formation,” Marion said.

Canada is lucky to have one of the fastest increases in household formation in the OECD in recent years.

…click on the above link to read the rest of the article…

Chinese Take Over Canada’s Real Estate Market, Buy One-Third Of All Vancouver Homes Sold In 2015

March 24, 2016

Chinese Take Over Canada’s Real Estate Market, Buy One-Third Of All Vancouver Homes Sold In 2015

“Housing in Vancouver is insane — it was insane when I left and it’s more insane now.”

That’s from 33-year-old Kevin Oke, co-founder of LlamaZoo Interactive who left Vancouver for Victoria two years ago because he couldn’t afford to buy a home in his native city even while earning a generous salary as a lead designer at a video-game company whose clients included Atari and Ubisoft Entertainment SA.

Kevin isn’t the only one leaving. Vancouver added only 884 net new people age 18-24 last year according to Statistics Canada, and many observers worry the soaring cost of housing will eventually strip the city of its burgeoning tech economy.

(a representative listing from Point Grey)

We’ve spilled quite a bit of digital ink documenting the “three-alarm fire” (to quote Bank of Montreal chief economist Doug Porter) that’s burning in British Columbia’s housing market. Here, for those who missed it, are some informative posts:

According to the Greater Vancouver Real Estate Board, residential property sales in Greater Vancouver rose 31.7% in January, 46% above the 10-year sales average for the first month of the year and the second highest January ever. The benchmark price for a detached home in Vancouver: $1,293,700. The benchmark price for an apartment: $456,600. The latest data from the Canadian Real Estate Association shows the average price of a home in Canada rose an astonishing 16% Y/Y last month to more than $500,000. Underscoring the extent to which British Columbia and Ontario are driving the market, stripping out those two provinces pulls the national average down to under $300,000.

…click on the above link to read the rest of the article…

Naomi Klein: ‘We Face a Series of Radical Options’

March 11, 2016

Naomi Klein: ‘We Face a Series of Radical Options’

An exclusive Tyee preview of Klein’s sold-out climate talk in Vancouver.

Naomi Klein

Naomi Klein: ‘Steady as she goes’ is not an option.

For anyone with even a passing knowledge of climate change, Naomi Klein needs no introduction. Her 2014 bestseller This Changes Everything was described as “the most momentous and contentious environmental book since Silent Spring” by the New York Times. And its central message that climate change is a symptom of our broken economic system has become impossible to ignore. Last year, it got her an invitefrom Pope Francis himself to lead a climate forum with his senior advisor. So when SFU Public Square announced that Klein would be speaking tonight, March 11, at Vancouver’s Vogue Theatre, the event promptly sold out.

Earlier this week The Tyee chatted at length with Klein about the pivotal moment in history we are now living in. There are only a few short decades left to achieve the goal agreed to at the Paris climate talks of limiting global warming to 1.5 degrees above pre-industrial levels. (Which is considered safer than the less ambitious two degrees goal accepted at Copenhagen). To do so would mean a full transition off fossil fuels by 2050. But if we fail, a multi-metre sea level rise could wreak enough social and economic havoc to “make the planet ungovernable,” according toformer NASA climatologist James Hansen.

Which is why Klein is convinced that the only options we have left are radical. Read on in this exclusive Tyee interview to find out why hope is one of them. Her remarks are edited for length and clarity.

On what the Paris climate talks really achieved:

…click on the above link to read the rest of the article…

The Vacant Condos in Vancouver

March 11, 2016

The Vacant Condos in Vancouver

Suddenly lurking in the shadow inventory.

The magnificent housing bubble in Canada has been stumbling recently, propped up largely by the two largest cities, Toronto and Vancouver.

Home prices declined 0.1% in January from a month earlier, the second month in a row of declines, according to the Teranet-National Bank National Composite House Price Index. Even Toronto booked a decline of 0.2%. The oil-dependent regions got hit harder. Prices rose only in four of the 11 metro areas in the index. On a 12-month basis, the index was still up only 5.9%, the lowest 12-month gain in three months.

But Vancouver has none of this slow-down rigmarole. Its housing market is booming, with prices up 12.5% year-over-year, beating Toronto’s 12-month gain of 8.5%. Due to their size, they account for well over half of the index.

In Vancouver, prices have now soared 40% from the peak of the bubble just before the Financial Crisis. This chart by NBF Economics and Strategy of the Teranet-National Bank House Price Index shows just how crazy prices have been in Vancouver:

Canada-Vancouver-home-price-index-2016-02

But the price increases might have been even crazier. Depending on methodologies used, “results may vary,” as they say. The Real Estate Board of Greater Vancouver reported that home sales in February jumped 36% from a year ago and were 56% above the 10-year average.

“We’re in a competitive, fast-moving market cycle that favors home sellers,” gushed REBGV president Darcy McLeod. “Sustained home buyer competition is keeping upward pressure on home prices across the region.”

So their benchmark price for all types of homes in Metro Vancouver soared 22.2% year-over-year to C$795,500.

In some of the more expensive neighborhoods, price increases were even higher. For instance, the benchmark price for all types of homes in Vancouver West and West Vancouver soared respectively 24% to C$1.1 million and 26.1% to C$2.25 million.

…click on the above link to read the rest of the article…

New mortgage rule might ‘temper’ hot markets, but not for long

February 12, 2016

New mortgage rule might ‘temper’ hot markets, but not for long

Starting Feb. 15, mortgage insurers require 10% down payment on portion of mortgages above $500K

Vancouver and Toronto saw real estate prices, particularly for detached and semi-detached home, continue to rise last year. Most other markets saw only modest increases, or even decreases in some cases.

Beginning next week, many Canadians hoping to buy an abode will need to put more cash down before they can call it home. The extra cost might keep some would-be homeowners from mortgages they can’t really afford, but it’s unlikely to leave any lasting impressions on the country’s most “overheated” real estate markets.

The federal government announced in December that mortgage insurers, including the Canada Mortgage and Housing Corporation — by far the largest in the country — will require a 10 per cent down payment on any portion of a mortgage it insures above $500,000 and up to $999,000.

That’s double the five per cent down they currently ask to insure mortgages worth more than 80 per cent of a home’s value.

“We want to make sure we create an environment that protects the people buying homes so they have sufficient equity in their home,” said Finance Minister Bill Morneau at the time, also noting that “elevated” house prices were the driving force behind the move.

The change will “likely impact a broad spectrum of buyers,” though it will surely be the highest hurdle for those who don’t already have a good bit of equity from one home already.

“The majority of the impact is going to be on first-time homebuyers, particularly first-time buyers in the hotter markets,” says Don Campbell, senior analyst at Real Estate Investment Network, an organization that tracks Canadian housing trends.

…click on the above link to read the rest of the article…

Vancouver Real Estate Goes Full-Retard; Average Home Price Now $1.8 Million

February 3, 2016

Vancouver Real Estate Goes Full-Retard; Average Home Price Now $1.8 Million

Last week we identified a “bargain” in Canadian real estate.

As you might recall, the Canadian economy is in a bit of a tailspin, and that goes double for the country’s dying oil patch. Indeed, we’ve documented Alberta’s painful experience with slumping crude exhaustively, noting that the steep decline in oil prices has triggered job losses (which hit their highest level in 34 years in 2015), depression, suicides, soaring food bank usage, and a marked uptick in property crime.

Through it all, parts of the real estate market in Canada remain red hot. In stark contrast to the millions of square feet of office space sitting vacant in beleaguered Calgary, Toronto and Vancouver are on fire.

Housing sales in the Toronto area rose 8.2% last month from a year earlier. The average selling price: $631,092.

In Vancouver, the numbers are simply astonishing. Residential property sales in Greater Vancouver rose 31.7% in January. That’s 46% above the 10-year sales average for the first month of the year and the second highest January ever, the Greater Vancouver Real Estate Board notes. The benchmark price for a detached home in Vancouver: $1,293,700. The benchmark price for an apartment: $456,600.

But it gets still crazier. The “benchmark” price represents what the Real Estate Board says a “typical” home would go for on the market. If we simply take the arithmetic mean (i.e. the average), the numbers are even more astounding. As CTV news reports, the average selling price of detached homes was much higher last month – at an astronomical $1.82 million.

“Home buyer demand is at near record heights and home seller supply is as low as we’ve seen in many years,” REBGV President Darcy McLeod said.

So a seller’s market. Got it.

…click on the above link to read the rest of the article…

Average Canadian house price up another 12% to $454,342

January 16, 2016

Average Canadian house price up another 12% to $454,342

But if B.C. and Ontario are stripped out, average house price declined by 2.2% last year

Hot markets in Toronto and Vancouver are skewing the national average price of a Canadian home higher, CREA says.

Hot markets in Toronto and Vancouver are skewing the national average price of a Canadian home higher, CREA says. (Daniel Acker/Bloomberg)

The average price of a Canadian home increased by 12 per cent in the year up to December and is now worth $454,342, the Canadian Real Estate Association says.

As it has done for a while, the realtor group says Toronto and Vancouver are skewing the national average higher. But if those two cities are stripped out, the national average drops to $336,994 while the annual gain is still 5.4 per cent.

“Leading the charge was Vancouver, where we have run out of superlatives to describe just how wild its market is,” BMO economist Sal Guatieri said. “[Vancouver] sales were up 33.7 per cent in December and benchmark prices vaulted 18.9 per cent.”

‘We have run out of superlatives to describe just how wild [Vancouver’s] market is’– Sal Guatieri, BMO

Indeed, those two cities are masking a housing market that is now getting cheaper on a national level. If the entire provinces of British Columbia and Ontario are stripped out, the average Canadian home was worth $294,363 in December — a decrease of 2.2 per cent during the past year.

Prices weren’t the only part of the housing market that rose during the month. The actual number of sales was up by 10 per cent in December compared to the same month a year ago. December is not typically a strong month for home sales as demand goes away during cold winter months.

“December mirrored the main themes of 2015, with strong sales activity and price growth across much of British Columbia and Ontario offsetting declines in activity among oil producing regions,” said Gregory Klump, CREA’s chief economist.

…click on the above link to read the rest of the article…

B.C. property assessments spike up to 30% in Vancouver

January 5, 2016

B.C. property assessments spike up to 30% in Vancouver

The home of Lululemon founder Chip Wilson was the highest-valued residential property in the province

Chip Wilson, founder of Lululemon yoga wear, has the home valued as the most expensive in B.C. by authorities.

Chip Wilson, founder of Lululemon yoga wear, has the home valued as the most expensive in B.C. by authorities. (Darryl Dyck/Canadian Press)

Property assessment notices have been mailed to homeowners in the Greater Vancouver area this week, with some homes jumping in value by up to almost 30 per cent.

The most expensive property in B.C. belongs to Lululemon founder Chip Wilson, whose seven bedroom, nine bathroom home on a double lot on Point Grey Road is now worth $63.8 million — an increase of 11 per cent from the year before. Yoga pants palace

Former LuluLemon CEO Chip Wilson’s new waterfront home in Vancouver’s Kitislano neighbourhood took five years to construct on three waterfront lots. (Google Maps)

The 10 most expensive residential properties in B.C. in 2016 were almost all worth more than $30 million. Most of them are located in Vancouver’s Point Grey, Shaughnessy or Kitsilano neighbourhoods.

“The 2016 assessments are indicating significant increases from 2015,” said assessor Jason Grant in a written statement.

“Increases of 15-25 per cent will be typical for single-family homes in Vancouver, North Vancouver, West Vancouver, Burnaby, Tri-Cities, New Westminster and Squamish.”

The total value of real estate in the province has increased to $1.34 trillion, or by 11 per cent since last year — with most of that coming from residential properties.

In Greater Vancouver alone, total assessments increased to $636.2 billion, an increase of about 16 per cent from the year before.

The municipalities with the largest increases in property values were:

Lions Bay: 17.96 per cent.
Squamish: 17.33 per cent.
Burnaby: 17.01 per cent.
West Vancouver 16.9 per cent.
Vancouver: 16.84 per cent.

The province-wide assessments reflect the market value of the properties as of July 1, 2015. Anyone can search the value of their property by using B.C. Assessment’s e-Value B.C. tool.

Homeowners who disagree with their property’s appraisal should contact B.C. Assessment by the end of the month.

Tim Flannery: ‘The Next Decade Is Going to Be Really Tough’

September 28, 2015

Tim Flannery: ‘The Next Decade Is Going to Be Really Tough’

A brutally honest conversation with the world-leading climate thinker, who speaks in Vancouver Oct. 14.

Tim Flannery didn’t become one of the world’s most influential climate thinkers by sugar-coating the truth. “If humans pursue a business-as-usual course for the first half of this century,” he warned in his seminal 2006 book The Weather Makers, “I believe the collapse of civilization due to climate change becomes inevitable.” But Flannery has always been clear-eyed about the opportunities we have to change our course. “The transition to a carbon-free economy is eminently achievable,” he wrote. The only things standing in our way are ignorance and pessimism and confusion.

Flannery has written about those obstacles in outlets like the New York Times and the Guardian. He’s convened business leaders at the Copenhagen Climate Council. He’s advised energy giants like India’s Tata Power. For such efforts he was recently given the Jack P. Blaney Award from Simon Fraser University’s Centre for Dialogue. When I reached him recently over Skype at his home in Australia, he was unflinchingly candid about all the hard work still ahead of us. “No matter what we do to reduce emissions the problem is going to get worse over the next decade,” he explained.

But it won’t be insurmountable. Flannery will describe the ways that our human species can solve it at a must-see discussion he’s leading in Vancouver on Oct. 14 (click here for tickets). Right now I’m writing my own book about climate change, which explores how Millennials such as myself are responding to a crisis that is defining our generation. So I appreciated Flannery’s brutal honesty when I put to him variations of the question that also happens to be the working title of my book: Are We Screwed? Our conversation below has been edited for clarity and length.

…click on the above link to read the rest of the article…

Foreign buyers driving demand for luxury homes, Sotheby’s says

September 16, 2015

Foreign buyers driving demand for luxury homes, Sotheby’s says

Luxury housing segment ($4M+) is hotter than the overall market in Vancouver, Toronto

International demand is expected to keep driving luxury real estate sales in Canadian cities for the rest of the year, according to a report from Sotheby’s International Realty.

A faltering Chinese economy and volatile global stock markets are likely to encourage an influx of foreign buyers, especially from mainland China, the company said in its fall outlook report.

Sotheby’s notes the surge in luxury sales in the first half of the year, with sales of property in the $4-million range rising 71 per cent in Vancouver and 72 per cent in the Greater Toronto Area.

Toronto and Vancouver are Canada’s hottest housing markets where even modest detached houses are priced at over $1 million.

With interest rates low and stable employment in both cities, 2015 has seen huge demand for housing in both cities, with more buyers than homes on the market.

But the luxury segment is even hotter than the overall housing market in Toronto and Vancouver, Sotheby’s said.

It predicts demand for condos over $1 million – considered a luxury price for a condo — will remain strong in both markets, especially near the downtown core. But the strongest percentage sales increases will be seen among detached homes in the $4-million range, it forecasts.

In Vancouver, demand for traditional luxury neighbourhoods will push high-end buyers east and south with neighbourhoods in Vancouver East and South Vancouver emerging as new options, Sotheby’s said.

Montreal also saw a period of heightened interest in its luxury properties in the fall of 2015 after the election of a Liberal government, Sotheby’s said. A luxury price in Montreal is in the $1.5-million range. The market is now more balanced, but foreign demand is picking up, it said.

…click on the above link to read the rest of the article…

Recession Risk Mounting For Canada

August 3, 2015

Recession Risk Mounting For Canada

The latest economic data from Canada shows that it is inching towards recession, after its economy posted its fifth straight month of contraction.

Statistics Canada revealed on July 31 that the Canadian economy shrank by 0.2 percent on an annualized basis in May, perhaps pushing the country over the edge into recessionary territory for the first half of 2015. “There is no sugar-coating this one,” Douglas Porter, BMO chief economist, wrote in a client note. “It’s a sour result.”

The poor showing surprised economists, who predicted GDP to remain flat, but it the result followed a contraction in the first quarter at an annual rate of 0.6 percent. Canada’s economy may or may not have technically dipped into recession this year – defined as two consecutive quarters of negative GDP growth – but it is surely facing some serious headwinds.

Canada’s central bank slashed interest rates in July to 0.50 percent, the second cut this year, but that may not be enough to goose the economy. With rates already so low, there comes a point when interest rate cuts have diminishing returns. Consumer confidence in Canada is at a two-year low.

There are other fault lines in the Canadian economy. Fears over a housing bubble in key metro areas such as Toronto and Vancouver are rising. “In light of its hotter price performance over the past three to five years and greater supply risk, this vulnerability appears to be comparatively high in the Toronto market,” the deputy chief economist of TD Bank wrote in a new report. A run up in housing prices, along with overbuilding units that haven’t been sold, and a high home price-to-income ratio has TD Bank predicting a “medium-to-moderate” chance of a “painful price adjustment.” In other words, the bubble could deflate.

…click on the above link to read the rest of the article…

It Gets Ugly in Canada

August 3, 2015

It Gets Ugly in Canada

“It’s an election about who will protect our economy in a period of ongoing global instability,” Stephen Harper, Prime Minister of Canada, announced on Sunday as he officially kicked off the campaign for the federal elections on October 19. He’d just asked Governor General David Johnston to dissolve Parliament.

“Now is not the time for the kind of risky economic schemes that are doing so much damage elsewhere in the world,” he said. “It is time to stay the course and stick to our plan.”

Stay what course, exactly? Because Canada is likely in the middle of at least a “technical recession.”

At first, there was hope that only the oil patch would be headed that way. Now the oil patch is already there. In the city of Calgary, Alberta, the epicenter of the oil bust, home sales plunged 14% in July year-over-year, according to the Calgary Real Estate Board (CREB). Year-to-date, homes sales are down 25%.

Despite months of assurances that the oil bust and the broader commodities rout won’t spread into the rest of the Canadian economy, they’re now beautifully spreading into it.

The Business Barometer Index of small business confidence dropped in July to 58.2, the worst level since mid-2009, a level that corresponds with a shrinking economy. “One normally sees an index level of between 65 and 70 when the economy is growing at its potential,” the report said.

That’s what Statistics Canada has been confirming for months: on Friday, it reported that GDP in May fell for a 5th month in a row.

“Much worse than the flat print expected by consensus,” is how Matthieu Arseneau, a Senior Ecoomist at National Bank Financial explained the phenomenon:

…click on the above link to read the rest of the article…

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