Vancouver, BC – April 15, 2016. The British Columbia Real Estate Association (BCREA) reports that a record 12,560 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in March, up 38 per cent from March of last year. Home sales last month eclipsed the previous record of 11,683 unit sales in May of 2007. Total sales dollar volume was $9.69 billion in March, up 66.9 per cent compared to the previous year. The average MLS® residential price in the province was up 20.2 per cent year-over-year, to $771,620.
“Housing demand has never been stronger in the province,” said Cameron Muir, BCREA Chief Economist. “Most large population centres of the province are now experiencing record levels of housing demand.“
“Strong employment growth, rising wages and a marked increase in net inter-provincial migration is fueling consumer confidence,” added Muir.
Supply imbalances are becoming increasingly common as new residential listings are not keeping pace with consumer demand. As a result, the inventory of homes for sale is at decade-long lows in many regions.
The year-to-date, BC residential sales dollar volume increased 70.1 per cent to $21.59 billion, when compared with the same period in 2015. Residential unit sales climbed by 39.2 per cent to 28,028 units, while the average MLS® residential price was up 22.2 per cent to $770,408.
This article was written by Rob Shaw and Matthew Robinson of the Vancouver Sun on February 16th, 2016.
VICTORIA — Premier Christy Clark responded to intense public pressure to fix Metro Vancouver’s housing affordability crisis Tuesday with a budget that offered a tax break on new homes and the promise to start collecting data on foreign buyers.
But real estate, business and academic experts say the modest changes will do little to spur new construction, slow price hikes or help most buyers get into the market.
The changes will see buyers save up to $13,000 from B.C.’s property transfer tax if they purchase a newly built home, condo or townhouse valued under $750,000, as long as they are Canadian residents who live in the home for at least a year. The tax break starts today.
It’s designed to boost the supply of new home construction and give people a helping hand to enter the market, said Finance Minister Mike de Jong. But it won’t cool the market enough for those who say they can’t afford to live in the Lower Mainland.
“If by cool you mean actually reduce the value of people’s major asset, their home, clearly we were not interested in taking that step,” said de Jong.
The tax break will be offset by a one-per-cent increase to the property transfer tax, to three per cent, on luxury homes that sell for more than $2 million.
Critics say the budget amounts to half-measures from a government that’s stuck between not wanting to intervene directly in the housing market and needing to look responsive to public frustration.
“It’s an attempt to try to be seen to be doing something; but lets face it, it’s not going to change affordability in Metro Vancouver very much at all,” said Jim Brander, a professor at the University of B.C.’s Sauder School of Business.
“It is possible to do things — there are big steps that could be taken,” Brander said, pointing as an example to moves in other countries to disallow foreign ownership and perhaps cause losses on people’s real estate investments.
“That would have a big impact, but that’s a huge step that Christy Clark has said, of course, she doesn’t want to take.”
Instead, Brander said, the government is giving a small measure of tax relief to some buyers.
“Relative to the cost of housing, what’s that going to do? Not much.”
Opposition NDP leader John Horgan said the government has made only “cosmetic changes around the edges” on housing and ignored a recent suggestion from university professors to create a B.C. Housing Affordability Fund built upon a 1.5-per-cent real estate surcharge on foreign owners.
There will be years of lag before new homes are built, even though the tax break is an overall good idea, said Cameron Muir, chief economist for the B.C. Real Estate Association.
“It will probably be effective to some extent but I don’t think you’re going to see a dramatic change,” added Ken Peacock, B.C. Business Council’s chief economist. It would be “very difficult” for government to change the housing market prices, he said.
The affordability measures were “helpful but modest,” said Jon Stovell, president at Reliance Properties and the incoming chair of the board at the Urban Development Institute.
“They’re certainly going in the right direction,” Stovell said, noting that about 80 per cent of non-single-family housing sold in the region is under the $750,000 price.
But Stovell said the new luxury tax rate for homes over $2 million was “a little bit disappointing” because the charge could end up being paid by developers purchasing land for new condos or townhomes and then passing on those costs to buyers of individual units.
Even as government sought to cool the housing market, it is enjoying a financial windfall from the property transfer tax it charges on sales. Revenue from that tax has jumped more than 40 per cent above last year’s expectations and is on track to bring in $1.5 billion in the current fiscal year — surpassing the revenue earned by the carbon tax.
Though some analysts continue to blame wealthy foreign buyers as one of the main drivers of rising home prices, the finance minister said he’s yet to see concrete data on how foreign ownership is impacting B.C.’s housing market. De Jong said he’d implement new rules that anyone buying real estate in the province will need to disclose their citizenship or country of residence, but wouldn’t speculate on whether that lays the groundwork for a future tax on foreign ownership or vacant homes.
“Before we were prepared to take a step of that significance we felt obligated to ensure we have better information,” he said.
De Jong said the province would also step up the sharing of information with the federal government, which is also trying to get a handle on foreign real estate investment and the avoidance of taxes.
The housing file was just one example of how Tuesday’s budget was mainly an attempt by the premier to do “political damage control” on high-profile files that she wants to clear off her plate in the run-up to next year’s election, said University of Victoria professor Michael Prince.
That includes $217 million over three years in additional funding for the Ministry of Children and Family Development, which has been rocked by several deaths and suicides involving children in care.
“This is an investment in trying to address some of those crises, and I suspect some of them will continue to flare up,” he said.
Next year’s budget, which will land three months before the May provincial election, will likely contain more sweeping and substantive changes to issues like housing affordability and rising Medical Services Plan premiums, said Prince.
Government exempted children from MSP rates in Tuesday’s budget, but once again raised rates for adults, adding hundreds of dollars a year to the costs of many families. A promised overhaul to what the premier has called an “antiquated” and unfair MSP system failed to materialize.
Her government did increase the disability income assistance rate for the first time in nine years, boosting the monthly rate by $77 to $983, effective Sept. 1. But those already receiving bus passes or transit assistance will get a lesser increase. The province’s overall welfare rate did not change, continuing a trend from the premier to target financial relief for certain groups without increasing overall assistance rates for the larger population.
The $47.5-billion 2016/17 budget estimated a projected $264-million surplus in the fiscal year starting April 1.
Education funding remained mostly frozen, while health care spending is set to increase by almost three per cent to $19.6 billion — or 41 per cent of total government spending.
10 things to know about the 2016/17 provincial budget:
1. Buyers of newly-built homes worth up to $750,000 will be exempt from the property transfer tax, saving up to $13,000, effective Wednesday (only for Canadian citizens or permanent residents).
2. The new home tax exemption will only apply to people who actually live in the home as their principal residence for a year after the purchase (relatives do not qualify) and B.C. will share information with Revenue Canada to double-check whether the rules are being followed.
3. Homes (both new and used) sold for more than $2 million will see an increased property transfer tax of 3 per cent, up from 2 per cent.
4. The existing first-time homebuyers program for used homes remains in place, but the threshold is unchanged for properties worth less than $475,000.
5. Property buyers will need to disclose their citizenship for government tracking.
6. MSP premium rates will rise $3 per month for an adult to $78, starting in 2017, but children are now exempt.
7. The special discounted MSP rate for couples is eliminated, adding $14 a month to a family with two adults.
8. Taxpayer-supported debt is budgeted to rise to $43.2 billion, which means 3.7 cents of every dollar government earns it pays in debt servicing.
9. The $47.5 billion budget next year will have an estimated surplus of $264 million. The economy is expected to grow 2.4 per cent.
10.Income assistance for those on disability will rise $77 a month, except for those who already receive a bus pass or transit assistance. It’s the first increase in the rate in nine years. The overall welfare rate remains unchanged.
Vancouver, BC – Februay 12, 2016. The British Columbia Real Estate Association (BCREA) reports that a total of 5,831 residential unit sales were recorded by the Multiple Listing Service® (MLS®) last month, up 33.2 per cent from January of last year. Total sales dollar volume was $4.39 billion in January, up 69.1 per cent compared to the previous year.
The average MLS® residential price in the province was up 26.9 per cent year-over-year, to $752,906.
“The BC housing market continues to build on momentum from a very strong 2015,” said Brendon Ogmundson, BCREA Economist. “Heightened demand is being met with the lowest level of supply in a decade, resulting in increased pressure on prices in much of the province.”
The housing market has seen a blistering start to 2016, with housing demand supported by low mortgage rates and rising employment and wage growth in the province. However, MLS® residential sales are forecast to edge lower this year. Total MLS® sales last year were the third highest on record at 102,517. A record 106,310 residential unit sales were recorded in 2005, while the only other year eclipsing 2016 were 2007 when 102,805 unit sales were recorded.
Vancouver, BC – January 28, 2016. The British Columbia Real Estate Association (BCREA) released 2016 First Quarter Housing Forecast Update today.
Multiple Listing Service® (MLS®) residential sales in the province are forecast to edge back 6.2 per cent to 96,100 units this year, after reaching 102,517 units in 2015. Strong consumer demand is expected to push MLS® residential sales up by 2 per cent to 98,000 units in 2017.
Housing demand in the province is being supported by a relatively robust economy, leading to strong employment growth and rising wages. In addition, net interprovincial migration is on an upswing as many Albertans look to BC for job opportunities. BC home sales are forecast to remain well above the ten-year average of 83,200 units over the next two years.
“The inventory of homes for sale is now at its lowest level in almost a decade,” said Cameron Muir, BCREA Chief Economist. “Fewer homes for sale and strong consumer demand are expected to push home prices higher in most BC regions this year and in 2017.” The average MLS® residential price in the province is projected to increase 6.4 per cent to $677,200 this year and a further 4.1 per cent to $705,300 in 2017.
New home construction activity is expected to remain at elevated levels corresponding to strong consumer demand and relatively thin inventories, particularly on the South Coast. Total housing starts in the province are forecast to remain close to an annual pace of 30,000 units through 2017, which will be the strongest two year performance since the 2007-2008 period.
This article appeared on CBC.ca on January 15th, 2016.
Service industry and resource exporters stand to gain from low Canadian dollar
Many of B.C.’s industries will benefit from the low Canadian dollar, making it likely the province will lead the country in economic growth this year, say economists.
The Canadian dollar dropped again Friday to 68 cents US, fuelling concern that the growing downward momentum means tough times ahead for the country.
But some experts say B.C.’s diverse economy means enough sectors will benefit from the low loonie to boost the province’s outlook overall.
“One thing that really is emerging from the current environment is the fact that B.C. is doing relatively well precisely because we are more diversified,” said Ken Peacock, vice-president and chief economist at the Business Council of British Columbia.
“B.C. is doing very, very well, probably will lead the country this year in terms of economic growth.”
Here is a rundown of how economists think some of B.C.’s industries will fare in a low-loonie environment. Service: tourism and film
Service industries like tourism and film are already feeling the benefits of a low Canadian dollar.
“Certainly in the services exports such as tourism, TV [and] film, the reaction is much more immediate,” said Helmut Pastrick, chief economist for Central 1 Credit Union.
Ski resorts like Whistler Blackcomb recorded 90,000 more visits for the fiscal year ending Jan. 3, 2016 than for the same time period the year before according to the company.
Those numbers are just the beginning of good times for B.C.’s $4 billion tourism industry says Tourism Vancouver.
“Now that [B.C.] is even greater value for those spending US dollars, we’re certainly expecting those numbers to go up in 2016,” said president and CEO, Ty Speer. Real estate
Those hoping the low dollar will mean relief for B.C.’s high housing prices are in for disappointment, according to Peacock.
“The Americans will be looking to British Columbia, property prices, and say you know what, there’s a 30 per cent discount for us.”
Pastrick agrees, but adds that the impact of additional foreign interest may not make much of an impact.
“Most of the demand, the housing sales that we see are from local residents. So in that sense the market will not be impacted too much.” Resources
Pastrick says the forestry industry in B.C. faces a mixed future. Demand for lumber will continue to climb, partially due to housing construction.
“U.S. housing starts will be higher this year and again in 2017,” he said adding that the outlook for softwood lumber exporters depends on agreement re-negotiations with the United States.
People in resources industries that rely on global demand may need to wait to see benefits, according to Pastrick.