Real Estate

Vancouver housing bubble?

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  • Aug 25th, 2019 10:46 am
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Sr. Member
Dec 30, 2012
854 posts
911 upvotes
Toronto
i6s1 wrote:
Apr 2nd, 2019 3:27 pm
I called it just a few posts above - they're blaming the government. The speculative bubble doesn't exist, according to them. This is just the government bringing down a completely normal market.

And it's funny now how that fundamental economic factors seem to matter. Prices rising faster than the economic factors would predict? Completely normal. Activity down when unemployment numbers are fine? Something's wrong here now....
Yes. And this:

"Housing demand today isn’t aligning with our growing economy and low unemployment rates. The market trends we’re seeing are largely policy induced," Ashley Smith, REBGV president said. "For three years, governments at all levels have imposed new taxes and borrowing requirements on to the housing market.”

Earth to Ashley - housing demand and prices were not aligned with INCOME. That’s now gradually correcting. And that low unemployment rate means little when Vancouver has some of the lowest average incomes in the country, thanks in part to mass immigration pushing down wages.

Also did you notice in the communication they seemed to cite the unadjusted average price for detached and towns, but the BENCHMARK average for condos? Some creative obfuscation possibly. I don’t have an issue with using benchmarks in order to smooth out sales mix fluctuations, provided that the calculation to arrive at the benchmark is transparent, but they seem to be using it selectively.
Deal Addict
Sep 6, 2010
1686 posts
431 upvotes
Vancouver
Haz wrote:
Mar 30th, 2019 12:40 pm
I met an elderly gentleman last summer who told me that a few days earlier, his wife suddenly "keeled and died" at home one evening. The ambulance attended and the usual nosy neighbours hung around outside that night.

The next day, he got a knock on the door from a real estate agent who said, "I heard there was a death in the home. Are you looking at selling?"

Needless to say, the gentleman slammed his door on the real estate agent.
Classic Vancouver mentality.
Deal Addict
Sep 6, 2010
1686 posts
431 upvotes
Vancouver
RxMills wrote:
Apr 1st, 2019 12:07 pm
"$75-billion snapshot of foreign-owned Vancouver real estate"

Vancouver Sun
March 28, 2019

New analysis shows non-residents of Canada own a much bigger proportion of local housing than previous official reports, with at least $75-billion worth of Vancouver-area residential real estate tied to offshore owners.

It wasn’t long ago that high-profile figures, in both industry and government, played down the role of foreign homebuyers in Vancouver’s housing market, using the information available at that time.

CMHC president Evan Siddall said it would be “convenient” but divisive and wrong to blame foreign buyers for skyrocketing prices, and, to bolster his point, cited recent CMHC data showing offshore buyers owned only 2.2 per cent of Metro Vancouver’s condos.

Now, using new methodology and more data, a report this month from the CMHC shows about 11 per cent of Metro condos are owned, at least in part, by people living outside Canada.

Drilling further into this month’s data release, Andy Yan, director of Simon Fraser University’s City Program, found the percentage is higher still in certain segments of the market: Of recently built condos in Richmond, for example, one-in-four has a non-resident owner.

https://vancouversun.com/news/local-new ... eal-estate

..........................................

Summary :
Federal government says 2% foreign ownership, but reality proves 11% (or 25% in Richmond) foreign ownership.

CMHC, showing they are a political organization, not a independent credible financial agency, that it would be "divisive and wrong to blame foreign buyers" (at their false 2% ownership statistic).

With the realistic 11% number, will they allow people to accurately say it is indeed influencing the market, or is politically proper to continue to produce inaccurate false data?
No shock to those who live here....even these new numbers seem to be on the low side, lots of corruption, laundered money and hiding of assets here.
Deal Addict
Sep 6, 2010
1686 posts
431 upvotes
Vancouver
hugeinpants wrote:
Apr 2nd, 2019 3:02 pm
https://vancouversun.com/news/local-new ... -ownership

B.C. to create government registry of beneficial property ownership
"For years, people were able to use shell companies, trust and partnerships to hide who really owns property in British Columbia," says finance minister.

VICTORIA — People who hold an interest in British Columbia property through corporations, trusts and numbered companies could soon have their names published in a government registry, according to new legislation.

Finance Minister Carole James introduced a bill Tuesday to launch a beneficial ownership registry, which would be the first of its kind in Canada and designed to increase transparency of land ownership in an attempt to combat tax fraud and money laundering.

“This act addresses government’s commitment to end the hidden ownership of land,” said James.

“For years, people were able to use shell companies, trust and partnerships to hide who really owns property in British Columbia.”

The registry, to go online in 2020, is intended to cut through the levels of secrecy that surround corporate ownership of property, such as when land is owned by one numbered company that is then controlled by another numbered company even though both companies are the same person. The government said the lack of transparency is contributing to money laundering and criminal activity.

The public will have access to the registry, names and property details in a manner similar to B.C.’s current land title office, said James. “High-level information will be available for search publicly,” she said.

The registry will be “self-funded” through search fees, according to the Ministry of Finance. The current land title office also charges the public to search its registry.

More sensitive information will be shared with law enforcement agencies, tax authorities and certain regulatory agencies to address fraud, tax fraud and money laundering, said James.

The legislation proposes to record the names of beneficial owners whenever a property title is transferred, and for any subsequent changes in the beneficial owners behind a company. All existing property owners will also have to declare, though the timeline for that is expected to be set later by cabinet order.

Penalties for remaining hidden under the legislation include a fines of up to $100,000, or 15 per cent of the assessed property values, for criminal offences.

The registry could crack open the names and titles currently hidden behind anonymous numbered companies, offshore trusts, blind trusts and corporations. Its creation was a promise of the NDP’s housing affordability plan first announced in 2018. Since then, the government has consulted with the Union of B.C. Municipalities and produced a study paper with draft legislation for feedback.

James also introduced legislation Tuesday to force B.C. businesses to identify all owners of companies in a new transparency registry. The legislation also proposes to end loopholes over bare trusts, in which some people could get around property transfer taxes and land title registration by simply selling controlling shares in companies that hold land rather than selling the land itself.

https://news.gov.bc.ca/releases/2019FIN0037-000545
If they follow through with this, the foreign ownership numbers will rise substantially, good on the government for going after these "anonymous" offshore buyers.
Deal Addict
Dec 27, 2006
1933 posts
906 upvotes
More supply?? lol

https://www.theglobeandmail.com/real-es ... /#comments

Vancouver housing sales tumble to 33-year low
Published April 2, 2019
Housing sales in the Vancouver region tumbled to a 33-year low in March while prices have fallen for 10 consecutive months.

Last month’s 1,727 sales in the region for various housing types were the lowest for March since 1986, the Real Estate Board of Greater Vancouver said on Tuesday.

Greater Vancouver home sales in March

Sales volume for detached houses, condos and townhomes

0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
2008
2010
2012
2014
2016
2018
2997
THE GLOBE AND MAIL, SOURCE: Real Estate Board of Greater Vancouver​

×

year sales
2008-01-01 2997
2009-01-01 2265
2010-01-01 3137
2011-01-01 4080
2012-01-01 2874
2013-01-01 2347
2014-01-01 2641
2015-01-01 4060
2016-01-01 5173
2017-01-01 3579
2018-01-01 2517
2019-01-01 1727
Greater Vancouver home sales in March

download csv
Total residential sales last month decreased 31.4 per cent compared with a year earlier, and were 46.3 per cent below the 10-year average for March.

Story continues below advertisement

The benchmark price (an industry representation of the typical home sold in an area) for all residential types in the Vancouver area last month declined 7.7 per cent compared with a year earlier. The benchmark price for detached homes, condos and townhouses has declined for 10 consecutive months, hitting $1,011,200 last month after setting a record high of $1,094,000 last May.

Industry officials say provincial and federal factors have combined to cool off what had been a runaway market, in which prices skyrocketed from mid-2013 to mid-2016.

“For three years, governments at all levels have imposed new taxes and borrowing requirements onto the housing market,” Greater Vancouver board president Ashley Smith said in a statement.

In August, 2016, the BC Liberal government introduced a foreign-buyers tax of 15 per cent in the Vancouver region. The BC NDP government raised the foreign-buyers tax to 20 per cent from 15 per cent in February, 2018, while expanding it beyond the initial target of the Vancouver region.

Other provincial factors include what the NDP calls a speculation and vacancy tax, targeted primarily at out-of-province residents, and British Columbia taxes aimed at higher-end properties.

The federal banking regulator implemented a stress test on Jan. 1, 2018, making it tougher to qualify for mortgages.

The benchmark price for detached houses sold in Greater Vancouver last month slid to $1,447,100, down 10.5 per cent compared with a year earlier. Over the past year, sales volume in the detached category slid 26.7 per cent, while condo sales decreased 35.3 per cent.

“The momentum is definitely downward,” said Peter Norman, chief economist at Altus Group, a real-estate data and advisory firm.

There could be further room for prices to fall later this year, given that the housing market is still up significantly compared with five years ago, he said. But Mr. Norman sees support on the demand side for the Vancouver region’s market for detached houses, condos and townhouses. “There is still job growth and in-migration, and usually, those ingredients are not precursors to a crash,” he said.

Altus Group forecasts 22,400 housing starts in the Vancouver region this year, down 4.3 per cent compared with 2018.
Deal Addict
Apr 10, 2011
1245 posts
737 upvotes
Vancouver
Tightening up more on foreign fake-investing, tax evasion, money laundering, etc.
....................................

BREAKING NEWS
National Post
April 2, 2019

"B.C. introduces law to prevent money laundering, tax evasion in real estate"

VICTORIA — British Columbia has introduced legislation for Canada’s first public registry of property owners to prevent hidden ownership in an effort to stop tax evasion and money laundering.

Finance Minister Carole James says the proposed Landowner Transparency Act would require corporations, trusts and partnerships, which currently own or buy land, to disclose their beneficial owners.

She says the legislation is part of the government’s housing strategy to close real estate ownership loopholes and crack down on property speculation, tax evasion and money laundering.

James says the property registry will give tax authorities, law enforcement agencies and regulators access to more detailed ownership information.

The government also introduced amendments to the Business Corporations Act to require private companies to hold accurate and up-to-date information about the owners of their shares.

James says she recently received a report from former deputy attorney general Maureen Maloney examining gaps in the real estate and financial sectors that could be exploited by money launderers.

https://nationalpost.com/pmn/news-pmn/c ... eal-estate
Deal Guru
Jan 27, 2006
11119 posts
4516 upvotes
Vancouver, BC
civiclease wrote:
Apr 2nd, 2019 3:42 pm
Earth to Ashley - housing demand and prices were not aligned with INCOME. That’s now gradually correcting. And that low unemployment rate means little when Vancouver has some of the lowest average incomes in the country, thanks in part to mass immigration pushing down wages.
Mass immigration has little to do with low average incomes. In Vancouver, low average incomes have always been a problem for decades. In fact, many large companies that are located here benefit greatly from this fact as they call it the "Vancouver premium" as a selling point for employees - ie why go on vacation to ski, surf, or hike when you have world-class facilities just outside the city?
civiclease wrote:
Apr 2nd, 2019 3:42 pm
Also did you notice in the communication they seemed to cite the unadjusted average price for detached and towns, but the BENCHMARK average for condos? Some creative obfuscation possibly. I don’t have an issue with using benchmarks in order to smooth out sales mix fluctuations, provided that the calculation to arrive at the benchmark is transparent, but they seem to be using it selectively.
But that's normal for the real estate industry - they will change the statistics to suit any story they want to tell. I highlighted that a year or more ago just as the market started to turn as they started to publish average BC prices over just Greater Vancouver prices.
Newbie
Mar 26, 2009
12 posts
9 upvotes
https://www.fvreb.bc.ca/statistics/fras ... rch-sales/

Fraser Valley Real Estate Board - News Release
Fraser Valley market sees typical spring increase in March sales

SURREY, BC – Last month, buyers in the Fraser Valley took advantage of the continued stability in home prices and the highest inventory levels for March since 2015.

The Fraser Valley Real Estate Board processed 1,221 sales of all property types on its Multiple Listing Service® (MLS®) in March, a 24.3 per cent increase compared to sales in February 2019, and a 26.6 per cent decrease compared to the 1,664 sales in March of last year. Of the 1,221 total sales, 462 were residential detached homes, 300 were townhouses, and 346 were apartments. This was the lowest sales total for the Board during March since 2013.

Darin Germyn, President of the Board, said of the market: “From a buyer’s perspective, there are more opportunities available as we move deeper into spring. Many of our communities are seeing higher inventory levels, especially in the attached market with the number of available townhomes almost doubling and Fraser Valley condos more than doubling compared to last year.”

There were 7,011 active listings available in the Fraser Valley at the end of March, an increase of 9.4 per cent compared to February 2019’s inventory and an increase of 46.2 per cent year-over-year.

The Board received 2,872 new listings during the month, a 29.6 per cent increase compared to February 2019’s intake of 2,216 new listings and a 0.2 per cent increase compared year-over-year.

“One of the reasons our market has remained stable is simply due to affordability. Although prices have increased dramatically over the last ten years, during the last twelve months we've seen prices for all major residential property types in the Fraser Valley decrease between four and five per cent. This is good news for buyers,” continued Germyn.

For the Fraser Valley region, the average number of days to sell an apartment in March was 38, and 29 for townhomes. Single family detached homes remained on the market for an average of 38 days before selling.

HPI® Benchmark Price Activity
  • Single Family Detached: At $963,100, the Benchmark price for a single family detached home in the Fraser Valley increased 0.4 per cent compared to February 2019 and decreased 4.2 per cent compared to March 2018.
  • Townhomes: At $517,300, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.3 per cent compared to February 2019 and decreased 4.5 per cent compared to March 2018.
  • Apartments: At $418,000, the Benchmark price for apartments/condos in the Fraser Valley increased 2 per cent compared to February 2019 and decreased 5.1 per cent compared to March 2018.

http://fvreb.bc.ca/statistics/Package201903.pdf
Sr. Member
Dec 30, 2012
854 posts
911 upvotes
Toronto
Is there a BC version of HouseSigma that shows historical sold data?

Detached homes in West Vancouver are now apparently selling below 2011 values but I have not found a source to confirm this.
Deal Expert
User avatar
Feb 9, 2003
17745 posts
2392 upvotes
Langley
civiclease wrote:
Apr 4th, 2019 3:58 am
Is there a BC version of HouseSigma that shows historical sold data?

Detached homes in West Vancouver are now apparently selling below 2011 values but I have not found a source to confirm this.
Not in general they are... but if you follow a few people on Twitter you'll see that *some* houses are now selling to close those prices. I don't read every post but I did see one in Vancouver a few days ago where a flipper sold for under the 2014 purchase price.

Here's a couple of guys to follow:

https://twitter.com/VanREflipflops
https://twitter.com/mortimer_1




Deal Addict
Jul 14, 2002
1948 posts
683 upvotes
i6s1 wrote:
Apr 4th, 2019 11:30 am
Not in general they are... but if you follow a few people on Twitter you'll see that *some* houses are now selling to close those prices. I don't read every post but I did see one in Vancouver a few days ago where a flipper sold for under the 2014 purchase price.

Here's a couple of guys to follow:

https://twitter.com/VanREflipflops
https://twitter.com/mortimer_1




It seems like the high end market, 2-3million+ are taking big hits all over the world, HK, London, Vancouver, Toronto, etc.
But what does that mean to the average joe's in segments from $300k - 1 million? Just curious as to what market effects people know of.
Deal Expert
User avatar
Feb 9, 2003
17745 posts
2392 upvotes
Langley
dantey wrote:
Apr 4th, 2019 12:19 pm
It seems like the high end market, 2-3million+ are taking big hits all over the world, HK, London, Vancouver, Toronto, etc.
But what does that mean to the average joe's in segments from $300k - 1 million? Just curious as to what market effects people know of.
It means that price drops are coming. There's a trickle-down effect. When a 5 million dollar house becomes a 4 million dollar house, the next thing that happens is that a formerly 4 million dollar house will become a 3 million dollar house. And so on down the line. The bubble was driven by the top end of the market, and the crash has started at the top too.

We're already seeing that benchmark prices have fallen 5% or so over the last year, across the Lower Mainland. In the world of Real Estate, that's a pretty unusual drop. It's not much compared to 100% price increses over the last 10 years, but you can see what's happening... The luxury market in Van peaked in the summer of 2016, and the broader market peaked 2017/2018.
Deal Guru
Jan 27, 2006
11119 posts
4516 upvotes
Vancouver, BC
i6s1 wrote:
Apr 4th, 2019 12:43 pm
It means that price drops are coming. There's a trickle-down effect. When a 5 million dollar house becomes a 4 million dollar house, the next thing that happens is that a formerly 4 million dollar house will become a 3 million dollar house. And so on down the line. The bubble was driven by the top end of the market, and the crash has started at the top too.

We're already seeing that benchmark prices have fallen 5% or so over the last year, across the Lower Mainland. In the world of Real Estate, that's a pretty unusual drop. It's not much compared to 100% price increses over the last 10 years, but you can see what's happening... The luxury market in Van peaked in the summer of 2016, and the broader market peaked 2017/2018.
There's also the possibility that some of those owner's of $5 million homes also have other assorted lower-priced homes as investments and as they lose money in their $5 million home, they might have to sell off some of their investment properties to fund their lifestyle cause the push down in prices at the lower end.

But seeing the recent numbers from the Fraser Valley, the current pricing difference is drawing people further out again as the price drops in Vancouver hasn't improved the market at all while the smaller drops in the Fraser Valley has done a bit to level things off. If the trend continues next month, I suspect that Vancouver sellers will start moving on the price as their realtors will start showing them buyers are available but not at the prices they are asking.
Sr. Member
Aug 3, 2006
598 posts
391 upvotes
1305 Kings Ave, West Vancouver just sold for $2.15M. Previous sale was in June 2016 at $3.3M.

June 2016 sale price $3,300,000
July 2017 assessed value $3,376,000
July 2018 assessed value $2,995,000
April 2019 sale price $2,150,000

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