Immigration and Employment to hold housing steady
Overall Market
- In a report released this month, the federal agency said 62 per cent of households owned a home in 1981 and by 2006 this proportion had risen to 69 per cent.
- Over the past few months most markets have started to cool with sales down 17% nationally, following moves by Finance Minister Jim Flaherty and the banking regulator to tighten mortgage lending rules.
- One of the world’s leading debt rating agencies, Moody, downgraded five of Canada’s big banks due to exposure to over-leveraged consumers. Stock markets were not affected with shares continued on a winning streak that’s been going on more than six months.
- According to Boston Consulting, in China, the number of millionaires hit 1.4-million in 2011 from 1.2-million the year before. That number is expected to keep growing “strongly” in the coming years. Investors from mainland China tend to see Canada as one of the top destinations for real-estate investment, according to real estate services provider Colliers International.
- Canadian building permits fell 11.2% in December after a 14.5% decline in November. The biggest two-month drop fall since the data series started in 1989, and left the value of building permits 16.2% lower than a year earlier.
- Canada Mortgage and Housing Corp showed the housing market was even weaker than expected, there were 9,904 actual starts last month, compared with 13,038 in January 2012.
- Sales were up 1.3% in January from December, the Canadian Real Estate Association. The trade group for the country’s real estate agents said that compared with a year earlier actual sales for January, not seasonally adjusted, were down 5.2%.
- The number of newly listed homes rose 1.6% month over month in January, the first monthly increase since last September
- The International Monetary Fund, in its annual report on Canada, also said the country’s currency was between 5 and 15% higher than warranted by long-term economic fundamentals and estimated that Canadian home prices are overvalued by an average of 10 per cent and predicted an “adjustment” over the next five years
- CMHC forecasts the number of housing starts to range between 178,600 and 202,000 units in 2013, with a point forecast of 190,300 units. In 2014, there will between 171,200 and 217,000 units of housing started, with a point forecast of 194,100 units. The average MLS price is forecast to be between $356,500 and $378,500 in 2013 and between $363,800 and $390,800 in 2014. Housing construction activity will trend lower in the first half of 2013, before gaining more momentum by the end of the year as economic and employment growth remain supportive of the Canadian housing market.
Vancouver
- Home sales are forecast to increase this year and next, with average prices dropping slightly in 2013 and crawling higher in 2014: the British Columbia Real Estate Association. This latest forecast calls for a 5.6-per-cent increase in the number of sales in 2013 and a further 6.1-per-cent increase in 2014, after the number of sales fell 11.8 per cent in 2012.
- In Metro Vancouver, the number of sales in Vancouver fell nearly 23 per cent in 2012, but the BCREA expects they will pick up over the next two years with growth in both employment and immigration and a hold on low interest rates. The forecast calls for 75,830 units to be sold in 2014 in B.C., while the five-year average is 74,600 and the 10-year average is 86,800 units, BCREA said. The average residential price is expected to drop one per cent in the province to $510,000 in 2013, and edge up 0.6 per cent in 2014 to $513,500. Housing starts in the province will fall 3.5 per cent to 26,500 units in 2013, and go up 1.5 per cent to 26,900 units in 2014, the forecast said. The transition from the harmonized sales tax to the provincial sales tax may add a short-term boost to new homes sales this spring, the forecast said.
Calgary
- Calgary’s resale housing market had its best January for sales since 2008 as average prices also climbed to their highest level ever for the month.
- According to the Calgary Real Estate Board, total MLS sales in the city in January were 1,230, up 15.17 per cent from a year ago while the average sale price rose by 12.34 per cent cent to $439,671. The previous record high for the average sale price in any January was in 2008 at $413,271.
- Factors that influence the Calgary housing sector include: The growth within the energy sector is significant along with consumer confidence in the marketplace as well as steady economic performance.
- CREB noted the single-family home benchmark price jumped by 9.01 per cent to $436,900. It rose by 7.49 per cent in the condo apartment category to $251,300 and it was up by 4.85 per cent in the condo townhouse category to $283,400.
- There were 34 MLS sales in Calgary of properties over $1 million in January — just shy of the January record of 36 luxury sales in 2007. Calgary finished 2012 with an all-time record of 544 luxury home sales, eclipsing the previous mark of 458 in 2007.
- Calgary census metropolitan area will grow by 1.37 per cent this year to 27,000 units followed by another 2.59 per cent growth in 2014 to 27,700 transactions.
- The average sale price is expected to rise by 2.59 per cent this year to $423,000 and by another 2.6 per cent in 2014 to $434,000.
- According to the Calgary Real Estate Board, year-to-date until February 21, total MLS sales in the city of 2,498 are up 11.57 per cent compared with the same period last year and the average sale price has risen by 10.63 per cent to $448,635.
Toronto
- Urbanation Inc., one of the leading research companies in the condo industry, said overall the Toronto census metropolitan area was 79% sold in the fourth quarter of 2012, down from 80% a quarter earlier and 82% a year earlier. It is above the 10-year average of 78%. Resale activity in the condo market was down 14% in the fourth quarter for the lowest quarterly level in a decade but Urbanation said it was due to a lack of listing.
- As of last September, net migration in Ontario had fallen by 20 per cent year-over-year to below 60,000 new residents, says a CMHC. That’s the lowest levels of net migration since the late 1990s and about 40 per cent less than the 110,000 or so people who migrated to the province annually.
- New condo sales in Toronto fell 47 per cent in the last quarter of 2012, even as the number of units under construction hit an all-time high, according to data from market research firm Urbanation.
- There were 3,841 new condos sold in Toronto in the last three months of 2012, compared with 7,226 sales in the same period a year earlier.
- At the same time, the number of total condo units under construction in Toronto hit a record high of 56,866 in 2012. The number of construction starts also hit an all-time high, at 24,388.
- Urbanation reports the average selling price in Toronto in 2013 was $536, up 5.2 per cent from the year before. That would suggest condo prices may be falling because developers are building smaller units.
- The Toronto Real Estate Board (TREB) is reporting a strong start to 2013. Home sales were down just 1.3 per cent in January over a year earlier, welcome news after six months of largely double-digit decreases.
Rob Zwick
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BUSINESS BASICS
Started as a Realtor in: 2006, but has worked in related industries since graduating from UBC in 2002.
Specialization: East & West Vancouver, North Shore and Downtown.
One-piece of advice for your clients: Be patient, but pounce the second you find something that meets all of your criteria.
Why RE/MAX? Rob started at a boutique firm, but found that it didn’t give a strong brand name behind him when it came to selling higher priced properties. RE/MAX allowed Rob to step into higher-end properties and enabled him to be surrounded by the best of the best.
“Beyond his expertise in the lower mainland real estate market, which I seriously needed in a volatile and fluctuating economy, I found Rob to be a genuinely caring human being. His patience, determination and commitment to meeting my needs rose above and beyond what I could have hoped for. He is bar none a great realtor and more important to me, an integral and hard working person that shows up, does the work and gets the job done.” -L. Johnson, Ubber Happy Client.
Q & A
1.What differentiates you from the 11,000 licensed real estate agents in the Greater Vancouver area? A combo of factors:
- I studied urban geography, which is the pre-requisite to urban planning
- My OCD mentality with customer service
- Finally, my work ethic
2. Who has been your most interesting client? One client tested me more than anyone; they were extremely diligent and worked Finance and Law. I worked with them for well over a year to find their perfect new house, then was hired to sell their older townhouse. They analyzed every part of my contract, requested multiple inspections and took their time to look at over 100 homes in multiple areas. Although it tested me, it also validated the level of my knowledge, will, and patience as a Realtor.
3. What was your favorite success story? I sold a 3-story sky loft in the Woodwards building. We put it for sale during the downturn in ’08. It was an impressive home, but limited to a particular seller. It was essentially a 1 bedroom, with lots of stairs, 2000 square feet and a 1.5 Million price tag. It was challenging to find the right person. After 5 months, with no sale, the owner who had an investing partner gave them an ultimatum to fire me or to lose their investment money. I was fired for the first time in my career. The owner hired another Realtor, the leading Realtor in the downtown market at the time. They couldn’t sell it. The owner came back to me and I encouraged them to rent it for a year before we put it back on the market. Once I was again hired to relist the property, we were able to sell it for over $100,000 more than our previous listed price. It was nice to have a client compare what I was doing versus an industry powerhouse, and clearly see the benefits of what I brought to the table.
4. What inspired you to be a Realtor? It was a situation of circumstance. Growing up my dad built architectural models for some of the best developers in North America. From school, my urban geography developed to an internship with Concert Properties where I realize I wasn’t meant for the corporate world. I was much more entrepreneurial. I started a real estate magazine with a couple of my friends in 2001. I ran it until 2007. In the last year, I stepped away after I got my license. It made me realize that this is what I was meant to do.
“Of the 1100 plus Realtors in town, Rob is definitely one of my favourites to work with. He’s smart, professional, hardworking and he really cares about his clients.” -Gina Rossi, Relator
PERSONAL SNAP SHOT
About: Rob’s wife is a massage therapist and they have two kids. He lives along Main Street (which was a home he jumped on the second he saw it. From the moment it was listed until his offer to purchase was agreed upon, only 90 minutes transpired).
Likes (If you had more time, what would you do more of): This past holiday season Rob had the opportunity to spend some quality time with family for nearly a month straight. He realized that value that he brings to his family when he is around more. With that he candidly noted his needs to limit the time he devotes to his work. He understands the importance of working with clients who value and appreciate his time and the work he does. He wants to focus his time to working with people that he wants to work with.
Rob wants to give more time to his family, get more social hours in with friends and spend quality working hours with his clients.
Loves (can’t live without): The guy stuff: electronics, cars, and photography. In particular, photography is a personal passion. Originating from his job as Realtor and wanting to capture the right pictures for his clients. He has been working on his art for the past 5 years and has enlisted friends to give him private lessons on specific aspects and perspectives. He’s appreciating that photography is become much more mainstream these days.
Thoughts on the current market: After seeing the run up, he thinks it’s nice to see a pull back. The market has been very inconsistent for both the buying and selling. The media is feeding the misconceptions, however, the stats are supporting what is happening. It’s a slow market, but there is little to choose from, the market is flooded with poor quality listings. The goods listing are selling quickly. There are a lot of buyers that are nervous and waiting for others to flinch. It’s a game of who looses patience first, the buyers or the sellers?
THE EXTRAS
Rob believes that clients are looking for someone to do their job in an ethical way. They want customer service and advice without being pushed. They need someone who can discern different patterns and developing neighbourhoods for future values. A person with neighbourhood and construction knowledge. Ultimately, they want an expert.
He thinks clients perceive him as a nice guy that works his ass off – who also has their best interest in mind, with a mentality to never give up.
Rob’s typical client tends to be young couples with kids. It’s an ideal client as he can relate as he has been through it and can provide recommendations on what to stay away from.
Rob enjoys working with great people and loves that no two days are the same. He reflected back on showing a float house in Ladner, a penthouse suite in downtown and a waterfront property in Indian River (North of Deep Cove) all in one day.
There are challenging days, which include dealing with highly emotional and stressful situations. In a buying situation, clients sometimes need things to happen instantly that are next to impossible, but Rob has built a network of contacts to manage and support their needs.
More than that, Rob maintains strong relationships with top Realtors in the community, which he believes helps him and his clients gain invaluable information about the market.
Cozy Comfort
Cozy Comfort
Brunswick Gardens
15, 12438 Bruswick Place, Richmond
MLS: V988339
List Price: $549,800 Floor Area: 1537 Unit: 3 Beds; 3 Bath Maintenance Fee: $282.00 Taxes: $2066
PROS
- Cozy and comfortable downstairs living area with living, dining, kitchen, ½ bath, laundry and patio.
- Nice patio area including cedar deck and a small green area maintained by the strata. High fencing for increased privacy.
- New designer kitchen.
- Large master bedroom with deck and walk-in closet.
- 3rd floor family room or office with roof-top deck.
- Parks and schools nearby.
- Nice neighbourhood/community, near boardwalk, dyke and Steveston Village.
CONS
- 2nd and 3rd levels are dated and require updating – the bathroom, bedrooms and additional family room could use upgrades to modernize and maximize space.
- Carpet on stairs, 2nd and 3rd floors should be replaced.
- Kitchen is a bit snug, but an adjoining nook area provides additional storage and/or seating space.
- Moderately high maintenance fees.
COMPARABLES
MORTGAGE DETAILS
2.99%; 549,800
High Ratio Loan (less than 20% down payment); 25-year amortization Purchase Price: $549,800 Down Payment (5%): $27,490 CMCH fees: $14,363.52 Total loan: $536,673.52 Amortization: 25 years Payment: $2,537.03
Approximate income required: $116,000
Conventional Loan (20% or more down payment); 30-year amortization Down Payment (20%): $109,960 Total Loan: $439,840 Amortization: 30 years Payment: $1,851.33
Approximate income required: $90,206.31
From my home to yours - Irene
Cowtown – Bullish
Overall Market
- Prospective sellers are waiting and prospective buyers are a bit shy
- The market right now is both slow and tentative, not really sure where things are going
- Concerns about the global economy may be another reason for the “tentative” market
- The latest Royal LePage report
- Average housing prices were up between 2% and 4% in the fourth quarter of 2012 compared with the same time last year.
- Average prices for Canadian residential real-estate will rise a further 1% by the end of 2013, as some owners opt to delay selling their property until conditions improve.
- Canada’s economy created far more jobs than expected in December, defying expectations amid sluggish growth and affirming the possibility of a central bank rate hike this year.
- Fewer homeowners listed their properties in the second half of the year, which kept inventory levels lower, and supported home values.
- The one thing missing from the market for those looking for a market crash is a catalyst or an event that will force people to reduce their asking prices. Before this housing market burns up in flames, it needs some type of spark. Two that come to mind are a spike in interest rates or job losses — this is not happening any time soon.
- Some financial advisors see that the long-term fall in home prices will not be reversed when the economy picks up, forecasting a smaller portion of the population, relatively speaking, is in their home-buying years calculating house values to be $100,000 less than they are now.
- If you are one of those who find their home to be their most significant retirement asset, financial advisors suggest taking the current opportunity to downsize, free up the equity, and invest in income-producing investments – bonds, preferred shares, income producing real estate or dividend-producing equities.
- Critics point out that despite the slowing mortgage growth, household debt, already at record levels, continues to rise. Bank of Canada Governor Mark Carney has repeatedly warned that elevated personal debt is one of the greatest risks facing the Canadian economy
- ING will now focus on the direct channel to consumers while the brokerage lending business will be diverted to Scotiabank
- As expected, the Bank of Canada kept a lid on borrowing costs, with its trendsetting overnight rate — the main instrument used to guide inflation toward the bank’s 2% target — remaining at a near-record low 1%, unchanged since September 2010 and now the longest dormant stretch since the early 1950
- The central bank rate has remained near historic lows for more than two years amid slowing global growth, driven by lower demand for exports from emerging economies, political turmoil in the U.S. and an unresolved debt crisis in the Euro zone.
- Forecasts that 454,000 homes will change hands in 2013, falling one per cent from the 2012 national performance.
- Slower sales and a flattening of home prices in Vancouver and Toronto — Canada’s two largest and most-expensive real-estate markets — will have a significant impact and drag down the national averages this year.
- The real estate market is relatively solid in Canada. There has been a slowdown in sales and in mortgage demand but price levels are relatively stable.
Calgary
- Alberta and Saskatchewan where the resource-oriented economies have been vibrant, are poised for significant growth in 2013.
- Alberta is the talk of the country and is planning on leading the country in economic growth.
- The city’s 2013 property assessments reveals a record number of single-family homes valued at $1 million or more, besting the previous high set in 2008.
- There are now 9,001 single-family homes assessed at $1 million or more, compared to 7,997 in 2012 — a 13-per-cent increase. The previous record of 8,262 homes was set during the previous boom, prior to the economic collapse in 2008.
- Calgary Housing Market is experiencing home sales that are putting a momentum of unaffordable housing.
Vancouver
- Home sales dollar volumes down
- Unit sales down (10-year average 88,000 units, 15-year average 79,000, 2012 average between 64,000 and 68,000)
- Average prices dropping in Lower Mainland
- Prices falling more noticeably in single-family homes in more expensive areas of the west side of Vancouver and Richmond
- The Real Estate Board of Greater Vancouver said in January total sales in 201 were off 22.7% from a year earlier
- Slowing residential sales means fewer jobs in construction and lower prices will cut the value of most households’ key retirement asset, the club heard.
- According to B.C. Assessment, the total change in assessed property values, as of July 1, 2012, was about five per cent in Coquitlam, Surrey and New Westminster. Changes were more notable in Vancouver, which rose just two per cent this year, and Richmond, which dipped 0.64 per cent.
- This year, for the first time in many years, a number of homeowners in some areas of B.C. will see a drop in their property assessment, B.C. Assessment said Wednesday
- There were 19,027 housing starts in Metro Vancouver for the year 2012, up more than six per cent from the year and from the 10-year average. 19,100 total housing starts forecast for the year
- Vancouver’s rental vacancy rate is 0.9 per cent, which is very low — a boon to real estate investors. A good, strong rental market, people is part of the reason we’re seeing more multiple-units.
- The year-long downtrend in sales constrained annual provincial activity to 67,640 units, a 12-per-cent drop from the previous year and the lowest annual tally since 2000.
- Chinese investors may return; based on China’s increased GDP, potential policy changes and new leadership.
Toronto
- New home sales continue to plummet in the Greater Toronto Area with the latest statistics from RealNet Canada Inc. showing a 52.1% drop in sales in December from a year ago.
- Toronto ranked as the fastest growing economy in the country last year, but a new study from CIBC suggests Canada’s biggest city will be hard pressed to maintain that growth trajectory
- December home sales in Toronto fell 19.5% compared with a year ago, but prices were still up, according to the city’s real estate association.
- The Toronto Real Estate Board said there were 3,690 sales in the Greater Toronto Area last month through the Multiple Listing Service, down from 4,585 in December 2011.
- The average price rose to $478,789 from $449,566 — an increase of 6.5% from the year before.
- Home sales dropping a precipitous 19.5 per cent year on year in December even as average prices shot up 6.5 per cent in the region.
Interest rate projections
- RBC expects The Bank of Canada could raise its trend-setting interest rate by half a percentage point before the end of this year.
- Both Scotiabank and CIBC said in December they expect rates to remain at their current level for the rest of 2013.
