November Home Sales Continue at Torrid Pace

BCREA release – The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 165% to 7,182 units in November compared to the same month last year. Last month posted the highest number of MLS® residential sales for the month of November since 2005, when 7,721 units changed hands.

Triple-digit gains in province-wide unit sales reflect a low number of unit sales in November 2008.

“BC home sales remained at an elevated level in November,” said Cameron Muir, BCREA Chief Economist. “Low mortgage interest rates, pent-up demand and strong consumer confidence continue to be key drivers in the market.”

The torrid pace of home sales in the Fraser Valley, Vancouver and Victoria has propelled the provincial total to near record levels. However, consumer demand in these markets is expected to moderate in the new year as pent-up demand is largely expended and higher home prices erode affordability.

Year-to-date, MLS® residential sales dollar volume increased 21% to $36.8 billion over the same period last year. A total of 79,325 units were sold in the first eleven months of 2009, up 19% from 2008, while the average MLS® price increased 2% to $463,555.

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BCREA release – The British Columbia Real Estate Association (BCREA) has just released its Fall 2009 Housing Forecast. BC Multiple Listing Service® (MLS®) residential sales are estimated to increase 20% to 82,900 units this year from 68,923 units in 2008. Residential sales in 2010 are forecast to increase a further 8% to 89,600 units. The ten-year average is 82,800 units.

Full story.

“A sharp rebound in consumer demand turned a potentially dismal year into a very strong year for home sales,” said Cameron Muir, BCREA Chief Economist. “Vancouver and Victoria, in particular, are posting near record unit sales this fall.”

BC interior housing markets are also experiencing robust consumer demand as low mortgage rates and stronger market confidence drive home sales higher.

The average annual MLS® residential price in the province is expected to post a new record this year, rising 2% to $463,200 and is forecast to climb an additional 4% to $482,800 in 2010.

“Recovery in the BC economy will unfold gradually next year,” added Muir. “With sales prices in some markets flirting with record highs, affordability constraints will limit home price inflation over the next year.”

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HOUSING MARKET REBOUND

Residential unit sales on the Multiple Listing Service® (MLS®) in BC are estimated to increase 20% to 82,900 units this year. A sharp rebound in consumer demand, particularly in Victoria, Vancouver and the Fraser Valley, has pushed home sales beyond expectations earlier in the year.

Pent-up demand, low mortgage interest rates and attractive home prices are key drivers in the market.

Consumer confidence is also playing a large role as recovery in the economy is on the horizon.

Prominent differences in regional markets exist. A dramatic rebound in consumer demand on the south coast is in contrast with a more gradual, and arguably sustainable, increase in demand in the interior of the province. Despite weak economic conditions, home sales in Vancouver have recently trended near historically high levels.

Further improvement in consumer demand is expected in the interior and Vancouver Island (outside Victoria).

Housing demand in the major metropolitan markets of the Lower Mainland and Victoria is expected to moderate from the recent highs as a pent-up demand is expended.

The average annual BC MLS® residential price is estimated to increase 2% to $463,200 this year, a record high. However, the increase is largely the result of a greater proportion of home sales this year occurring in BC’s higher priced markets. Next year, a modest increase in the BC MLS® residential prices are forecast, climbing 4% to $482,800. Tighter market conditions in many BC regions will contribute to the gain.

BC’s housing markets have faired extremely well since the beginning of the year. However, higher prices are again eroding affordability in some markets and by all accounts growth in the economy is expected to be at a modest pace next year.

Greater stability in BC’s housing markets is forecast through 2010.

ECONOMIC OUTLOOK

The BC Economy is expected to expand in 2010 after contracting an estimated 2.6% this year. Weak demand for commodities, a strong Canadian dollar and tepid consumer spending will set the stage for the slowest postrecession recovery since the early 1980s. Continuing economic malaise in the US will continue to retard economic growth as imports from BC continue to trend below long term averages.

Total employment in the province is estimated to decline 2.5% this year on an annual basis. Particularly hard hit is the goods producing sector where employment contracted 11% January through October, compared to the same period last year. Manufacturing and construction employment is down 12% over the same period.

Service sector employment is fairing relatively better, declining just 0.2% through October. However, transportation and warehousing employment, part of the service sector, is down 10%, largely the result of its reliance on goods producers. Total employment in BC is forecast to increase a modest 1.6% in 2010.

Once the overhang in US new home inventories draws down, housing starts south of the border should increase from a pace of 500-600k per annum to approximately 1.4 million in order to keep pace with household formation.

However, the increase is likely not to manifest until late in 2010. Demand for commodities is also expected to increase next year, but at a pace equivalent to the slow recovery in the global economy.

A dramatic rebound in home sales would suggest a corresponding increase in retail sales. However, retail sales have improved only modestly, signaling overall consumer demand has yet to return to normalcy. After declining an estimated 6.7% this year, retail sales are forecast to grow by a relatively modest 4.5% in 2010. Home sales on south coast are expected to moderate from current record levels, as waning pent-up demand and eroding affordability come into play next year.

Broad recovery in the BC economy is expected to be a rather slow and arduous affair. As a result, the economy could be many quarters out of a technical recession before there is any significant decline in the unemployment rate.

Net migration is not only an important component to the economy, but vital to new construction activity, the resale and rental markets. A positive natural rate of increase (births minus deaths) has little impact on household formation until decades after the fact. The largest component of migration stems from international origins. These migrants comprise approximately 90% of all net migrants to the province. Net international migration is forecast to decline 4% to 52,500 individuals this year, and then increase 6% to 55,900 individuals in 2010. Inter-provincial migration is largely influenced by the relative strength of provincial economies. The current economic climate has made employment opportunities relatively scarce in all provinces. Net inter-provincial migration is forecast to decline 32% to 5,700 this year and increase 9% to 6,200 individuals in 2009.

HOUSING STARTS

BC housing starts were on track earlier in the year to record their worst performance since 1962. However, recent increases in new construction activity are estimated to boost the annual total to match the year 2000. The sharp pull-back in housing starts corresponded with the financial crisis and the global recession. A sharp decline in consumer demand, rising inventories of complete and unoccupied units and tighter credit conditions virtually stalled building permits during the first half of the year.

Low mortgage interest rates combined with price adjustments contributed to a recent surge in home sales and many builders are now experiencing a decline of their inventories.

While housing starts are expected to climb next year, as builders respond to the stronger market conditions, the overall level of new construction activity will be relatively low compared to the past several years. Consumer demand can change quickly and new home construction typically lags market changes. This is particularly prominent with large condominium projects.

Housing starts in the province are estimated to total 14,400 units this year, a 58% decline over 2008. The sharpest decline is in multiple starts, where a 65% decline is expected. Next year, BC housing starts are forecast to increase 46% to 21,000 units. However, this level is considerably less than the 34,321 units started in 2008.

REAL ESTATE BOARD OF GREATER VANCOUVER

The Vancouver housing market experienced a dramatic rebound this year. MLS® residential sales increased threefold January to October on a seasonally adjusted basis, and is trending on record levels. A marked increase in affordability during the spring induced many potential buyers into the market and the resulting momentum quickly turned a buyer’s market into a seller’s market with upward pressure on home prices.

Rising home prices are again eroding affordability and the demand that welled up last winter during the height of the financial crisis is now largely expended. This means the pace of home sales recorded this autumn will likely moderate over the coming months. However, despite some moderation in consumer demand, home sales in Greater Vancouver are expected to remain relatively strong through 2010. After posting an estimated 41% increase to 35,500 units this year, home sales are forecast rise an additional 5% to 37,100 units in 2010, well above the ten-year average of 33,000 units.

The annual average MLS® residential sales price in Greater Vancouver is estimated to decline 1% to $586,000 this year. This reflects the cyclical low recorded early in the year and the recent price acceleration. The average annual price is forecast to rise 6% to $620,000 in 2010.

However, much of the increase will have occurred by the end of this year, with greater stability in home prices expected next year.

Housing starts in the Vancouver CMA are estimated to fall to their lowest in more than four decades this year. A sharp decline in units under construction and inventory levels that peaked at a relatively low level is setting the stage for home builders to ramp up production in 2010. The lag between conception and completion of new housing may create a period of under-supply in the new home market. This condition will help underpin price levels in both the new and resale markets in Greater Vancouver.

Related articles:

BCREA revises housing forecast: price fall stops, house sales to surge 10% in 2010

Forecast: Vancouver home prices to fall 13% in 2009

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REBGV release – Strong demand has led to a steady rise in Greater Vancouver home prices compared to last year.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 6.8% to $553,702 from $518,668 in October 2008.

“While home prices have been rising in 2009, they have not eclipsed the peaks reached in early 2008,” Scott Russell, Real Estate Board of Greater Vancouver (REBGV) president said. “We’re coming off several months of unseasonably high sales levels, which has allowed for a gradual increase in home values this year,”

The REBGV reports that residential property sales in Greater Vancouver totalled 3,704 in October 2009, an increase of 4.1% from the 3,559 sales recorded in September 2009, and an increase of 171.6% compared to October 2008 when 1,364 sales were recorded. Looking back two years, last month’s sales increased 22.3% compared to October 2007 when 3,028 sales were recorded.

“High confidence and low mortgage rates are continuing to drive the activity we’re seeing in the housing market today,” Russell said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,977 in October 2009. This represents a 2.3% increase compared to October 2008 when 4,867 new units were listed, and a 13.4% decline compared to September 2009 when 5,764 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.

At 12,084, the total number of property listings on the MLS® decreased 4.1% in October compared to last month and declined 37% from this time last year.

Sales of detached properties increased 201.6% to 1,487 from the 493 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 7.7% from October 2008 to $749,808.

Sales of apartment properties in October 2009 increased 148.4% to 1,607, compared to 647sales in October 2008. The benchmark price of an apartment property increased 6.3% from October 2008 to $380,975.

Attached property sales in October 2009 are up 172.3% to 610, compared with the 224 sales in October 2008. The benchmark price of an attached unit increased 4.6% between Octobers 2008 and 2009 to $468,798.

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REBGV release – The number of home sales in Greater Vancouver increased significantly last month compared to August 2008 and moved closer in line with the active summer months experienced between 2003 and 2007.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver increased 119.5% in August 2009 to 3,441 from the 1,568 sales recorded in August 2008 and increased 1.7% compared to August 2007.

New listings for detached, attached and apartment properties increased 4.9% to 4,544 in August 2009 compared to August 2008 when 4,331 new units were listed. Total active listings in Greater Vancouver currently sit at 11,937, down 33% from August 2008.

“The return of confidence to our market has brought a high volume of home sales over the last few months and has also made determining home prices a little more challenging,” said Scott Russell, REBGV president.

“The number of residential home sales this summer has been comparable to activity seen in the five years preceding 2008. While that’s great news, from the variations in activity we’re seeing across areas I’d say the market is still trying to find its own balance.”

Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 11.4% to $539,600 from $484,211.

However, home prices compared to August 2008 levels are down 1.1%.

Sales of detached properties in August 2009 increased 155.5% to 1,367 from the 535 units sold during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties declined 0.7% from August 2008 to $732,656.

Sales of apartment properties increased 97.8% last month to 1,464, compared to the 740 sales in August 2008. The benchmark price of an apartment property declined 1.4% from August 2008 to $369,263.

Attached property sales in August 2009 increased 108.2% to 610, compared with the 293 sales during the same month in 2008. The benchmark price of an attached unit declined 0.9% between August 2008 and 2009 to $459,159.

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REBGV release – The Greater Vancouver housing market gained further momentum in July with record sales levels and a continued strengthening of home prices.

The Real Estate Board of Greater Vancouver (REBGV) reports that the number of residential property sales in Greater Vancouver totalled 4,114 in July 2009, becoming the highest volume of sales ever recorded within the REBGV for that month, outpacing the 4,023 sales in July 2003, which is the only other year that July sales exceeded the 4,000 mark.

Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 9.2% to $528,821 from $484,211. However, home prices compared to July 2008 levels are down 5%.

“Home sales this summer are seasonally higher than normal, which is due in large part to the price correction that has taken place in the last year and low interest rates,” Scott Russell, REBGV president said. “Although well-priced listings and lower-to mid-range priced properties remain in the highest demand across Greater Vancouver, recent activity from first-time buyers is beginning to boost demand in the “move-up” segment of the market.”

New listings for detached, attached and apartment properties declined in Greater Vancouver, down 17.4% to 5,041 in July 2009 compared to July 2008, when 6,104 new units were listed. At 12,482, the total number of property listings on the Multiple Listing Service® (MLS®) declined 5.8% compared to last month and 34% compared to July 2008.

“It is currently taking, on average, 48 days for a home to sell in the region. Today’s market activity differs by area and property type and it’s important to tap into local housing market expertise to understand why some properties are attracting multiple offers, while others are not moving,” Russell said.

July 2009 home sales declined 3.4% compared to June 2009, but are up 89.2% when measured against the 2,174 sales recorded in July 2008.

Sales of detached properties in July increased 95.2% to 1,614 from the 827 detached sales recorded during the same period in 2008. The HPI benchmark price for detached properties declined 5.5% from July 2008 to $711,702. Since the beginning of the year, the benchmark price for detached properties in Greater Vancouver has increased 9.8%.

Sales of apartment properties in July 2009 increased 76.8% to 1,708, compared to 966 sales in July 2008. The benchmark price of an apartment property declined 4.3% from July 2008 to $365,291. Since the beginning of the year, the benchmark price for apartment properties in Greater Vancouver has increased 9.6%.

Attached property sales in July 2009 are up 107.9% to792, compared with the 381 sales in July 2008. The benchmark price of an attached unit decreased 4.6% between July 2008 and 2009 to $452,085. Since the beginning of the year, the benchmark price for attached properties in Greater Vancouver has increased 6.8%.

Bright spots in Greater Vancouver in July 2009 compared to July 2008:

Detached:

Burnaby up 121.7% (153 units sold from 69)

North Vancouver up 53.3% (115 units sold from 75)

Maple Ridge/Pitt Meadows up 60% (160 units sold from 100)

Richmond up 140.2% (221 units sold from 92)

Vancouver East up 66.4% (208 units sold from 125)

Port Coquitlam up 236.4% (74 units sold from 22)

Vancouver West up 104.5% (180 units sold from 88)

South Delta up 203.1% (97 units sold from 32)

West Vancouver up 108.1% (77 units sold from 37)

Sunshine Coast up 60.5% (69 units sold from 43)

Attached:

Burnaby up 123.3% (134 units sold from 60)

Maple Ridge/Pitt Meadows up 77.7% (64 units sold from 36)

North Vancouver up 70% (51 units sold from 30)

Vancouver West up 110% (105 units sold from 50)

Richmond up 152.1% (179 units sold from 71)

Vancouver East up 195.8% (71 units sold from 24)

Port Coquitlam up 117.6% (37 units sold from 17)

Maple Ridge/Pitt Meadows up 77.7% (64 units sold from 36)

Coquitlam up 88.2% (64 units sold from 34)

Apartments:

Burnaby up 72.8% (235 units sold from 136)

North Vancouver up 47.9% (105 units sold from 71)

Richmond up 85.5% (230 units sold from 124)

Vancouver East up 64.2% (179 units sold from 109)

Vancouver West up 94% (584 units sold from 301)

New Westminster up 70.6% (116 units sold from 68)

Coquitlam up 62.3% (86 units sold from 53)

Port Moody/Belcarra up 138.1% (50 units sold from 21)

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Sponsored by the British Columbia Real Estate Association (BCREA), the May 2009 Mustel Group survey tracked several key measures asked in a January 2009 BCREA survey, including top affordability barriers and how provincial taxes impact BC homebuyers. It also uncovered new primary data on buyer intentions and energy-efficiency practices at home.

Findings revealed that four-in-ten British Columbians plan or hope to purchase homes or properties within the next five years, with about half of these potential buyers expecting to do so in the next two years. A higher proportion plan to purchase in Metro Vancouver (46%) than elsewhere (35%), which may indicate that consumer confidence is now higher in the urban area. In the January 2009 survey, findings did not vary by region.

“We’ve had five consecutive months of increasing home sales, which may suggest that the optimism uncovered in this survey is being reflected in provincial home sales,” explains BCREA president John Tillie. “The May 2009 survey also revealed that people’s perception of the barriers to home ownership have also changed, which is good news for homebuyers, sellers and renters.”

Although affordability continues to be the key barrier to purchase, along with concerns about job security, lowering market values and general concerns about the economy, a slightly higher proportion of BC residents in the May 2009 measure indicated they did not have any purchase barriers at all. There was also a decrease in the number of people concerned about depreciating property values and less mention of general financial barriers.

The survey findings also revealed that making smart green choices at home is still top of mind for most British Columbians. When asked if they were more likely, less likely or about as likely to make green improvements to their homes compared to this time in 2008, one out of every two BC residents answered that they were more likely now to green their home than they were approximately one year ago.

“It’s important to remember that all of us can take part in reducing household greenhouse gas emissions by improving the overall energy efficiency of our homes,” says Tillie. “Green choices are smart choices, and they help improve the Quality of Life in our communities.”

Survey findings suggest the majority of British Columbians (65%) would be willing to pay more for an energy efficient home.

“Because this survey immediately followed the provincial election, we also asked British Columbians whether they were happy with the attention paid to housing issues during the campaign,” says Tillie. “Only one in four were satisfied, which is something BCREA plans to address looking toward the next provincial election in 2013.”

MAJOR FINDINGS

The British Columbia Real Estate Association commissioned Mustel Group to conduct a second survey of British Columbians after the provincial election to track key measures asked in the first survey in January and to further explore various aspects of home ownership and green features. Key findings from this second survey of 600 BC residents include:

• Only one-in-four British Columbians are satisfied with the attention paid to housing issues during the provincial election.

• A total of four-in-ten plan or hope to purchase a home or property within the next five years, with about half of these potential buyers expecting to do so in the next two years. A higher proportion plan to purchase in Metro Vancouver (46%) than outside the city (35%), which may indicate that consumer confidence is now higher in the urban area. In the first survey, the findings did not vary by region.

• Availability of affordable properties continues to be the key barrier to purchase. Other barriers include ability to qualify for a mortgage, adequate income, employment security, and property taxes (with a higher proportion than in the first survey citing property taxes as a barrier).

• For almost one-in-five, the Property Transfer Tax continues to be a major financial barrier to home ownership.

• Almost half (44%) of those aware of the PTT say it is at least ‘somewhat’ important in their home buying decisions.

Green Improvements

• Compared to approximately one year ago, half of BC residents are ‘more likely’ today to make green improvements to their home indicating a strong trend.

• Furthermore, residents have taken a number of measures to make their homes more environmentally friendly with the most common including installation of florescent bulbs and energy efficient appliances.

• The cost, followed by a belief that their home is already energy efficient, are the primary reasons for being less likely than in the past to do green renovations. Among those who believe their home is already efficient, only one-in-six have had an energy audit.

• A total of 17% of home owners report to have had an energy assessment of their home. Again a belief that their home is energy efficient, lack of awareness of assessments (or what they entail), and cost are the key reasons for not having had an energy assessment.

• One-in-five of those who have not had an energy assessment claim they are at least ‘somewhat’ likely to do so in the near future.

• The majority, 65%, claim they would be likely to pay more for an energy efficient home.

Home Ownership

• As found in the first survey, two-thirds of British Columbians reside in single family detached homes, this level increasing to over seven-in-ten outside Metro Vancouver.

• Only one-third of City of Vancouver residents live in a single family home. Instead, approximately one-half live in an apartment.

• Three-quarters own their homes, with home ownership increasing with age, ranging from about 65% among those 18-34 years, to just over 80% among those 55 years of age or over.

• Only about half of City of Vancouver residents own their homes.

Bought a home in the last 5 years

• Approximately one-third of BC residents have bought a home or property in the past five years, with this level relatively consistent across the province except in the City of Vancouver where only about one-quarter have made a purchase.

• About one-in-ten have made more than one transaction, with again this level consistent across the province.

• Those under 55 years of age are more inclined to have made a real estate purchase than their older counterparts.

Plan to buy a home in the next 5 years

• Approximately four-in-ten plan or hope to purchase a home or property within the next five years, with about half of these potential buyers expecting to do so in the next two years.

• In the first measure we found that the findings were similar in Metro Vancouver and outside this region. In the second measure, a higher proportion in Metro Vancouver (46%) hope to purchase than outside the city (35%) which may indicate that consumer confidence is now higher in the urban area.

• Those under 35 years of age (the age group with the lowest incidence of home ownership) are most inclined to expect to buy (approximately 60%).

Plan to sell in the next 5 years

• Approximately one-in-four plan to sell a home or property in the next 5 years, with again about half hoping to do so in the next 2 years.

• The findings are similar in Metro Vancouver and outside this urban area.

Purchase barriers

• Affordability continue to be the key barrier to purchase. Concern about job security, lowering market values and general concerns about the economy are secondary obstacles.

• Note that a slightly higher proportion in the current measure did not have any obstacles, with a decrease in the proportion concerned about depreciating property values. There also appears to be less mention of general financial barriers, perhaps all signs of an improved economic climate.

Specific financial barriers

• When probed with specific financial barriers, availability of affordable properties is still the key factor. Secondary financial barriers are employment security, mortgage rates, ability to qualify for a mortgage and property taxes (with a higher proportion in the May survey citing this barrier than in the first survey).

• For approximately one-in-five, the property transfer tax is a major financial barrier.

The margin of error on the total sample is +/-4% at the 95% level of confidence. The margin of error is larger on sub-samples. Interviewing for the first measure was completed January 22-28, 2009 and the second measure May 28 to June 3, 2009 weekday evenings and during the day on Saturday from Mustel Group’s CATI (computer assisted telephone interviewing) centre located in Vancouver. The questionnaire administered for the second survey is appended to the report.

Complete report here.

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More balanced market conditions have emerged, effectively ending the stronghold that buyers had on the market over the past six to eight months. Canada’s largest markets, Toronto and Vancouver, led the charge-with June sales among the highest in history for both local real estate boards. Close to 11,000 properties changed hands in Toronto, up 27% over one year ago, setting a new record for sales in the month of June. The figure was just slightly off the all-time peak of 11,146 units. Residential sales in Greater Vancouver increased 75.6% over one year ago, to 4,259 units, just short of the record breaking 4,333 sales, which occurred in June 2005. Overall, major markets began to recover in March, posting escalating sales in April, May and June. The impetus is expected to continue throughout the remainder of 2009, with most centres now forecasting year-end sales on par or ahead of 2008 levels.

“While sales are the leading indicator, there are other clear signals that recovery is indeed underway,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Renewed consumer confidence, albeit cautious, has been key, supported by improved economic news. In addition, we’ve seen sale price-to-list price ratios climb across the country, rising as high as 105% in some communities. Vendor incentives have also come off the table, both for resale and new housing stock.”

The recent surge in resale activity can be attributed to three key factors-pent-up demand, low interest rates, and greater affordability. The combination-in conjunction with declining inventory levels-has created heated market conditions in hot pocket neighbourhoods, prompting a resurgence in multiple offers in June. Average prices are holding steady or climbing, days on market are down, and inventory levels continue to tighten, especially at entry-level price points.

“The strength of the market, amid the most significant global recession in recent history once again underscores its relevance to the nation’s economic engine,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Canadians believe in homeownership — a fact best illustrated by the purchasers who ventured forward in recent months and snapped up some of the best real estate deals this market has seen in years. Those who chose to sit it out on the sidelines are now facing a market in transition, characterized by the threat of rising interest rates, low inventory levels, and upward pressure on housing values.”

Although the current pace may be unsustainable, all markers point to greater stability in the market, leading to healthier activity in the long run, with inventory levels a key variable influencing pent-up demand.

Market by market overview:

Greater Vancouver Area

Growing consumer confidence levels have prompted a serious upswing in home buying activity in the Greater Vancouver Area, with sales in June (4,259) the second highest on record for the local real estate board. From White Rock to Vancouver, radiating out to the Fraser Valley, bidding wars are breaking out on well-priced product. In Kitsilano, an estimated 50% of housing is selling in multiple offers. Low interest rates and increased affordability – average price is still significantly lower than one year ago – have served to stimulate market activity. Inventory levels have been on the decline in recent months, placing greater upward pressure on values. First-time buyers are driving freehold hous ing sales at the $600,000 price point, while those looking at more affordable alternatives are considering condominiums starting at substantially less. Balanced market conditions prevail overall. Pent-up demand has also been building, with local purchasers and international investors both active in the market. The upcoming Olympics, and the completion of the much anticipated Canada Line this Fall are expected to further bolster the cautious optimism characteristic of the Greater Vancouver market at present. Home buying activity, as a result, is forecast to continue at a healthy pace for the remainder of the year, with year-end sales slightly ahead of 2008 levels.

Calgary

Balanced conditions have returned to Calgary’s resale housing market. Strengthening momentum – residential sales at over 3,000 units were up in double-digit territory in June -has already begun to place upward pressure on prices in the entry level. With increasing competition among first-time buyers, the supply of starter homes is tightening. Buyers who moved in spite of doom and gloom forecasts in the Fall, Winter, and early Spring realized considerable savings, while those who hesitated are discovering it has cost them. Multiple offers are re-emerging in a few choice neighbourhoods on well-priced product, although there are still a few good deals to be had in the mid-range. Prices on the whole, however, are stabilizing. Signs of a transitionally stronger market include rising sales-to-new listings ratios, shorter days on market, and fewer incentives from vendors/builders. Activity is expected to remain better than average this summer, as those who paused over the past six months dive back in before interest rates rise. Momentum will continue to build into the fall, with overall 2009 sales edging slightly ahead of 2008 levels by year-end.

Edmonton

The residential resale market is springing back to life in Edmonton, with sales setting a new record for the month (June) and the third best month for unit sales in MLS history. While activity has been steadily improving in the second quarter, the heated momentum has yet to put any serious pressure on average price, which, although rebounding, remains down year-over-year. The market has shifted, moving from buyer’s territory to more balanced conditions, prompted by the recent flurry in home buying and the slow return to more traditional inventory levels. Stability will characterize Edmonton’s housing sector going forward, with low interest rates, rising consumer confidence levels and affordability the impetus behind healthy demand. The frenzied climate of previous upswings will be conspicuously absent. While multiple offers have re-emerged – particularly in the $300,000 to $450,000 price point – they will continue to be the exception rather than the rule, driving sales price close to, but not typically over, asking price. Demand is expected to remain strong in the months ahead, bolstered by looming interest rate hikes and glimmers of positive news on the economic horizon, as consumers regain a cautious optimism.

Regina

Positive economic performance continues to bolster home buying activity in Regina. Despite a 10% decline in year-to-date sales (1,778 vs. 1,977 units) from levels reported January to June 2008, the gap is narrowing as purchasers move to take advantage of low interest rates and greater affordability. Sales in May and June were up in double-digit territory over one year ago and momentum is building. First-time buyers remain the most active segment of the market, sparking sales under $275,000. Inventory levels have been responsible for the steady upward pressure on housing values in the lower-end of the market. Limited supply of starter product in Regina has most properties in good condition, in desirable communities, moving quickly – some in multiple offers. The top-end of the market has also seen some bounce back, with sales between $400,000 and $450,000 up about 25% over one year ago.

Condominium sales, however, have softened year-over-year, with an oversupply of product currently listed for sale. Although conditions currently favour the buyer, the market is transitioning. More balanced conditions are expected to emerge in the months ahead. Given a continuation of current economic fundamentals, the number of homes sold in Regina by year-end is expected to match 2008 levels.

Greater Toronto Area

Pent-up demand for residential housing continues to fuel home buying activity across the Greater Toronto Area. The number of homes sold in June – at 10,955 — came close to the historic record of 11,146 units set in May 2007, while pressure on average price is sending housing values higher than one year ago. Although balanced market conditions prevail, there are those communities that have clearly transitioned into sellers markets. Inventory is key, with the number of properties currently listed for sale down approximately 30% from 2008 levels. Over the past six weeks, momentum has been building, with demand strongest for homes priced between $300,000 and $600,000. Multiple offers are once again commonplace, especially in the city’s coveted hot pocket neighbourhoods. Affordability – in terms of low interest rates and housing values – has been the impetus for first-time buyers. Luxury home sales have also experienced solid demand in recent months, with 291 homes changing hands over the $1 million price point in June – a new record. The threat of higher interest rates and home prices are expected to stimulate a flurry of home-buying activity in the months ahead. By year-end, sales are forecast to exceed 2008 levels.

Ottawa

Solid economic fundamentals in the nation’s capital continue to prop up housing activity. Year-to-date sales for January to June are slightly ahead of 2008 levels, with the number of properties sold in June (1,895) up 12.5% over one year ago – the third consecutive record setting month. Pent-up demand has been a major factor, with purchasers who put their home buying decisions on hold during the late fall and early winter now entering the market en masse. As a result, the balanced market that prevailed in recent months is now shifting in favour of the seller. Multiple offers are occurring on desirable properties in virtually every price range. Inventory levels, which peaked in April, are now falling. With less product on the market, certain segments are experiencing serious shortages-in fact, single family homes priced between $275,000 to $375,000 are few and far between. In the past four to six weeks, the upper-end has also started to rebound as all segments of the market work in tandem. While the threat of an upcoming election will have some impact on the market, healthy sales activity is expected to continue throughout the remainder of the year, with sales ahead of 2008 levels.

Halifax-Dartmouth

Improved purchasing power, combined with the threat of rising interest rates, effectively spurred fence-sitters back into the resale housing market in June, halting the trend of double-digit declines in sales. The number of homes sold was up five% to 805 units in June 2009, compared to one year ago.

Despite the increased momentum, buyers remain firmly in the driver’s seat, benefiting from increased inventory and negotiating muscle, as motivated vendors adjust pricing to position their homes more competitively. Although sales remain down year-over-year, the gap is narrowing. Affordability and the stability of Halifax-Dartmouth’s relocation market continue to prop up activity, and first-time buyers remain the driving force. Opportunity exists for purchasers in the mid-to-upper price ranges, where demand and conditions have generally been softer. Consumer confid ence is strengthening once again. With the upswing expected to extend into the fall, more balanced market conditions are forecast to emerge, and Halifax-Dartmouth may once again find itself a market in transition.

St. John’s

Strong consumer confidence, buoyed by a vibrant local economy and a healthy employment picture, has kept St. John’s real estate engine moving at a steady clip. With billions of dollars in capital works projects planned or underway, in-migration remains positive and demand for resale housing continues to be solid. Improving inventory levels have shifted the market slightly into buyers territory, giving purchasers the necessary traction to make their moves. The threat of interest rate hikes has further stimulated home buying activity, pushing fence-sitters off the sidelines and into action. Residential sales in June 2009 (354 units) are slightly ahead of June 2008 (351 units) figures. The year-to-date average price recorded a 24% increase to $211,221, compared to $170,500 for the same time period last year, bolstered by greater momentum in the mid-range. Corporate transfers have been a significant stimulus. Entry-level homes, priced between $100,000 and $200,000, are being snapped up at an unprecedented pace given the sharp upswing in pricing. Listing inventory levels are higher and the upper-end continues to move well, supported by the relocation market. Inventory will be a key factor influencing St. John’s housing sector in the months ahead. The pace is expected to continue, with sales rounding out the year at or ahead of 2007 levels, but below record numbers reported in 2008.

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“May’s increase is a welcome development, but it is too early to tell if the worst is over for the construction industry or the economy,” says Keith Sashaw, Vancouver Regional Construction Association President. “However, there are certainly some encouraging signs the construction industry may have reached the bottom of the market and is now on an upward trend.”

In the Lower Mainland-Southwest region, total building permit values jumped 36 per cent to $296.1 million in May compared to April, led by a 95 per cent rebound in non-residential permits. Residential permits edged-up one per cent in the same period.

“May saw significant increases in non-residential permits,” says Sashaw. “The large surge in commercial permits issued in May is the highest regional figure since last November. And, the June housing sales numbers released last week also offer hope that new housing construction will pick up in the coming months, possibly as early as the fourth quarter this year.”

Year-to-date, total building permit values in the Lower Mainland-Southwest region are down 57 per cent to $1.3 billion dollars compared to last year, led by residential permits, which are down 65 per cent to $687.3 million. Non-residential permits are down 42 per cent to $613.2 million in the same period.

“The construction industry anticipates the institutional-government sector will be heading higher in the next year or so when more of the fiscal stimulus spending hits the economy,” says Sashaw. “It is our hope that increased building activity in 2009 will set the stage for a recovery 2010.”

With more than 700 members, VRCA is British Columbia’s largest and most inclusive regional construction association, representing union and non-union, general and trade contracting companies, manufacturers, suppliers and other professionals throughout the Lower Mainland from Hope to Whistler.

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REBGV release – The combination of low interest rates and more affordable pricing helped propel Greater Vancouver home sale numbers to the second all-time highest total for the month of June.

The Real Estate Board of Greater Vancouver (REBGV) reports that sales of detached, attached and apartment properties increased 75.6% in June 2009 to 4,259, from the 2,425 sales recorded in June 2008. The figure is just short of the record-breaking 4,333 sales which occurred in June 2005.

New listings for detached, attached and apartment properties declined 17.9% to 5,372 in June 2009 compared to June 2008, when 6,546 new units were listed. However, new listings increased 13.5% from May to June of this year. Total active listings in Greater Vancouver currently sit at 13,252, down 27% from June 2008 and 2.9% below the active listings count at the end of May 2009.

“Price reductions and low interest rates have created an improvement in affordability, which is causing the number of sales to rise to levels comparable to 2003 to 2007,” Scott Russell, REBGV president said.

“Many people who were reluctant to purchase a home last fall and earlier this year are returning to the market because they see conditions that appeal to their personal and financial needs,” Russell said. “However, the current marketplace is such that buyers are more inclined to walk if they don’t like the terms of an offer.”

Residential benchmark prices, as calculated by the MLSLink® Housing Price Index, declined 8.2% to $518,855 in June 2009 compared to June 2008.

The number of sales of detached properties increased 81.6% to 1,667 from the 918 detached sales recorded during the same period in 2008. The benchmark price for detached properties declined 8.4% to $701,384 in June 2009 compared to June 2008.

The number of sales of apartment properties in June 2009 increased 69.3% to 1,790, compared to 1,057 sales in June 2008. The benchmark price of an apartment property declined 8.2% from June 2008 to $356,880.

The number of attached property sales in June 2009 increased 78.2% to 802, compared with the 450 sales in June 2008. The benchmark price of an attached unit declined 7.3% between June 2009 and 2008 to $441,620.

Bright spots in Greater Vancouver in June 2009 compared to June 2008:

Detached:

Burnaby up 109.7% (151 units sold from 72)

Coquitlam up 122.2% (160 units sold from 72)

Delta – South up 107.7% (56 units sold from 27)

Maple Ridge/Pitt Meadows up 54.3% (162 units sold from 105)

New Westminster up 104.8% (43 units sold from 21)

North Vancouver up 96.2% (153 units sold from 78)

Port Moody/ Belcarra up 120% (33 units sold from 15)

Richmond up 77.4% (204 units sold from 115)

Squamish – up 107.7% (27 units sold from 13)

Sunshine Coast – up 33.9% (75 units sold from 56)

Vancouver East – up 71.2% (238 units sold from 139)

Vancouver West up 85.2% (200 units sold from 108)

West Vancouver/Howe Sound up 117.8% (98 units sold from 45)

Attached:

Burnaby up 81.8% (140 units sold from 77)

Coquitlam up 80% (54 units sold from 30)

Maple Ridge/Pitt Meadows up 48.6% (55 units sold from 37)

North Vancouver up 121.2% (73 units sold from 33)

Port Coquitlam up 82.6% (42 units sold from 23)

Port Moody/ Belcarra up 77.3% (39 units sold from 22)

Richmond up 84.5% (155 units sold from 84)

Vancouver East up 118.5% (59 units sold from 27)

Vancouver West up 121.8% (122 units sold from 55)

Apartments:

Burnaby up 60.4% (239 units sold from 149)

Coquitlam up 93.9% (95 units sold from 49)

New Westminster up 57.1% (121 units sold from 77)

North Vancouver up 71.4% (120 units sold from 70)

Port Coquitlam up 58.1% (49 units sold from 31)

Port Moody/Belcarra up 128.6% (48 units sold from 21)

Richmond up 54.1% (225 units sold from 146)

Vancouver East up 58.7% (165 units sold from 104)

Vancouver West up 87.2% (627 units sold from 335)

West Vancouver/Howe Sound up 155.6% (23 units sold from 9)

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REBGV release – A continued increase in buyer activity over the last four months has resulted in increased home sales and lessened the downward pressure on housing prices in Greater Vancouver.

The Real Estate Board of Greater Vancouver (REBGV) reports that the number of residential property sales in Greater Vancouver totalled 3,524 in May 2009, an increase of 17.4% from the 3,002 sales recorded in May 2008, and an increase of 18.9% compared to last month.

Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 4.5% to $506,201 from $484,211. However, home prices compared to May 2008 levels are down 10.9%.

“The increased level of buyer activity over the last few months has had a stabilizing effect on home prices across our region,” Scott Russell, REBGV president said. “MLS® data continues to show a trend toward a balanced market in the region.”

New listings for detached, attached and apartment properties declined in Greater Vancouver, down 36% to 4,733 in May 2009 compared to May 2008, when 7,390 new units were listed. At 13,641, the total number of property listings on the Multiple Listing Service® (MLS®) declined 4.7% compared to last month and 16% compared to May 2008.

Sales of detached properties increased 16.5% to 1,402 from the 1,203 detached sales recorded during the same period in 2008. The HPI benchmark price for detached properties declined 11.8% from May 2008 to $680,320.

Sales of apartment properties in May 2009 increased 17.2% to 1,458, compared to 1,244 sales in May 2008. The benchmark price of an apartment property declined 10.2% from May 2008 to $349,987.

Attached property sales in May 2009 are up 19.6% to 664, compared with the 555 sales in May 2008. The benchmark price of an attached unit decreased 9% between May 2008 and 2009 to $435,848.

Bright spots in Greater Vancouver in May 2009 compared to May 2008:

Detached:

• Burnaby up 48.9% (140 units sold from 94)
• Maple Ridge/Pitt Meadows up 13.4% (144 units sold from 127)
• North Vancouver up 31.4% (134 units sold from 102)
• Port Moody/Belcarra up 52.6% (29 units sold from 19)
• Richmond up 14.0% (170 units sold from 142)
• Vancouver East up 11.1% (180 units sold from 162)
• Vancouver West up 63.4% (232 units sold from 142)

Attached:

• Burnaby up 31.5% (96 units sold from 73)
• Maple Ridge/Pitt Meadows up 43.8% (46 units sold from 32)
• North Vancouver up 31.8% (58 units sold from 44)
• Vancouver West up 54.5% (102 units sold from 66)

Apartments:

• Burnaby up 32.6% (187 units sold from 141)
• North Vancouver up 22.6% (103 units sold from 84)
• Richmond up 27.4% (200 units sold from 157)
• Vancouver East up 28.7% (139 units sold from 108)
• Vancouver West up 25.4% (529 units sold from 422)

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