I presume most of them will simply be cancelled.
Does anyone know how many are currently under construction vs. how many in planning phase?
Jun 10th, 2019 7:37 pm
I presume most of them will simply be cancelled.
Jun 10th, 2019 7:51 pm
Even if they cancel or postpone any of the projects that don't have a shovel in the ground, many of the developers will be left holding the bag on the carrying cost of the land as well as taxes and fees. They might be luck in that they might not have torn down the houses on that land and can reno them for resell - of course they would be selling them at a loss but when you need cash flow...
Jun 10th, 2019 7:54 pm
Interesting point of view to say the least but it looks like they are trying the old argument of 'they ain't making any more land' and 'better buy now as you will never see this price again'...A study of 20 years of Metro Vancouver real estate data has led a local real estate brokerage to conclude that the market is “primed for a comeback.”
Dexter Realty reported that, despite listing inventory being higher currently than in the recent market boom, it is still at historically relatively low levels compared with the huge numbers of homes for sale during the market dips seen in 1997-1999, 2008-2009 and 2012-2013.
The brokerage pointed to May sales of Metro Vancouver homes being 44.2 per cent above those in April, and said that it showed a market that has “a gasp of breath.” It said that this increase in demand combined with relatively low supply is a sign of confidence in the market.
Kevin Skipworth, managing partner of Dexter Realty, wrote in his analysis, “During the periods between 1997 to 1999, 2008 to 2009 and 2012 to 2013 monthly home sales in Greater Vancouver persisted below 2,000 units. In each of these periods, there were either over or close to 20,000 listings on the market. In this current cycle we are seeing the market struggle to get over 15,000 active listings — at a time when the overall housing stock is at its highest. Demand is increasing and will increase, and supply is clearly less than other significant slower markets.”
To illustrate this, Skipworth, who is an economics graduate, highlighted the number of sales and listings in those past market slumps in charts using Real Estate Board of Greater Vancouver data. He said it shows that the difference between now and then is that recent monthly sales have exceeded 2,000 units while listings have not exceeded 15,000 homes.
Skipworth continued, “There is confidence in the Metro Vancouver real estate market long term—with more buyers and fewer sellers, it will lead to stabilization in the market. We may be seeing prices bottom out in the lower and middle end of the market, but there are still great opportunities for buyers. However, [those opportunities] are diminishing.”
Skipworth noted that housing affordability has not significantly improved for most home buyers, and blamed this on federal and provincial government policy.
He concluded, “The recent intervention on the demand side by the provincial government through taxes and the federal government through the stress test only served to reduce prices significantly in the high end for those the government wanted out of this market and, unwittingly, prevented home buyers from getting into homes in the lower end. Thus affordability overall has not improved and will not get any better without a serious look at the ill-conceived government policies and other factors keeping new homes from making it through the rezoning process to completion.”
The brokerage's analysis comes after Central 1 Credit Union deputy chief economist Bryan Yu predicted that home sales in the Lower Mainland would be 14 per cent lower in 2019 than 2018, but would recover to approximately 2018 levels in 2020, while benchmark prices would continue to drop until 2021.
Jun 10th, 2019 8:10 pm
So, it looks like the folks at Dexter won't have to worry about low inventory levels now or in the foreseeable future.What happened: April saw a burst of building permit activity in Metro Vancouver as developers got ahead of development cost changes.
Why it matters: As a result, B.C. residential permit values nearly doubled their previous record, and Canadian values hit an all-time high.
Planned changes to Metro Vancouver development costs this past May pushed April building permit values to new heights.
The region issued $1.8 billion in permits this April, up nearly 88% month-to-month and up 131% year-over-year.
In its data release, Statistics Canada said the increase was tied to developers getting ahead of the first cost changes in Metro Vancouver since 1997.
The activity meant B.C. nearly doubled its previous record for residential permits. At $2.2 billion for the month of April, residential permits across the province – primarily for multi-family buildings – rose 138% over March, and by nearly 126% over April 2018.
Helped by Metro Vancouver, Canadian municipalities issued a record $9.3 billion in permits, up 15% or $1.2 billion from March.
It is the largest increase since May 2007, according to Statistics Canada. British Columbia accounted for most of the gain.
Jun 10th, 2019 9:01 pm
20 years in real estate. Thats what, 2-3 years in the stock market in terms of price volatility? Also im seeing a ton of assumptions with no backing in this statement.craftsman wrote: ↑ For your reading pleasure -> Real estate market ‘primed for a comeback’: Metro Vancouver brokerage.
Interesting point of view to say the least but it looks like they are trying the old argument of 'they ain't making any more land' and 'better buy now as you will never see this price again'...
Jun 10th, 2019 9:43 pm
Jun 10th, 2019 11:54 pm
I suspect that we will see many more of these reports in the coming months trying to get buyers to buy in a declining marketplace. We will probably also see more blame on the Feds about mortgage rules (funny how those same rules aren't affecting the more affordable regions of the country - Ottawa is up, Montreal is up and even Toronto is up), more talk about increasing supply as there will be thousands of more people moving into Vancouver in the next 10 years, and of course like this one on how it's a great time to buy and prices have hit bottom.
Jun 11th, 2019 1:25 pm
At the time Vancouver City Council was holding hearings re: duplex zoning the entire city (which was passed despite the significant amount of public outcry), I was trying to calculate exactly how many dwellings were in the City vs. number of households and ran into some difficulty with getting "apples to apples" numbers due to the wide variety of statistics out there and what/when they represent. I do recall some expert suggesting a couple of years prior that there were something like 1.15 dwellings to every household implying that we already had more than we needed at that time.
Jun 11th, 2019 1:56 pm
Jun 11th, 2019 1:58 pm
The first question should be relatively easy to find and agree upon what that number is. There may be a question about illegal/legal suites but really it's a small percentage so it shouldn't count for much.choclover wrote: ↑ At the time Vancouver City Council was holding hearings re: duplex zoning the entire city (which was passed despite the significant amount of public outcry), I was trying to calculate exactly how many dwellings were in the City vs. number of households and ran into some difficulty with getting "apples to apples" numbers due to the wide variety of statistics out there and what/when they represent. I do recall some expert suggesting a couple of years prior that there were something like 1.15 dwellings to every household implying that we already had more than we needed at that time.
My questions now are:
1. How many household dwellings do we currently have in Vancouver?
2. What is the ratio of dwellings to households in Vancouver?
3. Who is going to occupy the vast number of extra units in the city?
Jun 11th, 2019 2:03 pm
The last point is actually supported by the recent numbers published about the increasing numbers in BC who are financial distress -> up 5+% over the previous year for April if I remember correctly - and that's with an economy doing relatively well. I would hate to think what's happening to those with reverse mortgages and got them at the height of the market (ie. those $3.5 million homes which are now worth $2.5 million...)... what type of squeeze is happening there. And of course, it's property tax season so people are getting their invoices which may just add to the financial pressures.RxMills wrote: ↑ In a recent conversation with someone involved in real estate each day, they mentioned how things are indeed different now.
- The mortgage stress test is in but it's only one factor, but that's only for one type of buyer.
- The additional tax on $3M+ has hit that segment hard. Some of it is psychological. Overall, it adds to all the other increased carrying costs, especially on the amount of property that isn't being fully utilized.
- Buying and holding "extra" space or properties has fallen out of favour.
- West side $3M+ is really looking bad, with a rapidly growing supply, an aging supply of 60+ days, and low demand (and with lowball offers). There is a growing # of houses which peaked at $3.5M which are being sold now at $2.5M. As time goes on, it's affecting lower levels. (Initially hitting mainly the $5M+, then $3M+, then...?).
- Hoarding properties paid off in the past on a rising market with increasing demand and shrinking supply. More than half of new supply was being grabbed by hoarders with 2 benefits - low carrying costs and asset growth. Now, higher carrying costs with declining growth has soured that group.
- The crowd mentality has gone from Vancouver. It's a powerful emotional factor, especially for some segments of buyers. I imagine this is one key factor keeping the Toronto condo market going.
- Government economists are generally pleased with this "softened landing". However, they're still worried about the condo market in some centres.
- In a perfect economy with maximum employment, there are many high priced condos being sustained by 2 incomes with no "extra" income or capital reserve. They're maxed out. The economy sometimes goes down. Globally speaking, Canadians are now putting almost everything into their homes. It's their savings account for leveraging loans and their retirement fund.
Jun 11th, 2019 2:07 pm
Basically, the NDP government tried their best in how to find these homes and only came up with one which turned out to be wrong quickly after it was announced.It appeared to be the coup de grâce of a Canadian dirty money probe into real estate: a sprawling island manor off the coast of Vancouver that the government said was linked directly to an alleged criminal conspiracy at a state-run Indian bank.
A six-month investigation commissioned by the province of British Columbia had scoured more than a million land titles for signs of illicit funds swirling through Canada’s most expensive housing market. While thousands of properties were flagged as suspect, almost all fell short of clear criminal links.
Save one, according to the probe’s final report. “Most astonishingly,” Attorney General David Eby declared at a press conference when it was presented, “a $3.5 million Gulf Island property acquired with funds allegedly embezzled from a $90 million loan fraud in India.”
It appears the government jumped the gun on that, too. There’s little evidence to show the mansion was bought with criminal proceeds — it was purchased by an Indian entrepreneur long before he faced the accusations of fraud.
The tenuous link is the latest misstep by the provincial government after multi-billion dollar laundering estimates it presented that same day failed to hold up to scrutiny. Premier John Horgan is under pressure to deliver answers to a public outraged that the cost of a typical Vancouver home has surpassed $1 million. He’s blamed the price surge on what he’s called “unchecked” fraud and launched a formal inquiry into money laundering in a bid to cool the market.
Jun 11th, 2019 2:08 pm
A better outcome for bears would be developers renegotiating land/zoning/construction costs and build the units at a lower cost. Vancouver RE would have to fall A LOT for all the projects to be cancelled. Some of the projects need to be postponed so that construction trades can be forced to drop their prices. And some projects would need to be re-launched with lower development fees for the city.
Jun 11th, 2019 2:29 pm
Should Eby resign over the scandal?craftsman wrote: ↑ Another interesting article on how the government's money laundering push is going - Another misstep as B.C. fails to prove this tycoon's idyllic estate was bought with embezzled money
Basically, the NDP government tried their best in how to find these homes and only came up with one which turned out to be wrong quickly after it was announced.
Jun 11th, 2019 2:48 pm
No as the voters will decide their fate soon enough. But they should take ownership over the mistake and put safeguards in place so that it doesn't happen again if they want to be re-elected on this platform. After all, these were the same people who expressed so much anger over the failed federal prosecution of a money laundering case a few months back only to have their much published 'victory' go down in flames the same day it was announced.