Author: Admin

From the Vancouver Sun.

The mortgage-rate fuelled bounce back of British Columbia real estate in 2009 has probably used up most of the market’s growth for 2010 and 2011, according to a new estimate from the B.C. Real Estate Association.

Association chief economist Cameron Muir is forecasting province-wide sales in 2010 to increase only three per cent above the hot 2009 results to 90,100 sales in 2010, then slip back three per cent to 87,500 units in 2011.

The provincial average price, Muir is forecasting, will advance five per cent to $490,900 in 2010 then eke out just one-per-cent growth to $494,800 in 2011.

Muir characterized his forecast as 2009 ending with a “gold medal finish, [which] will give way to a silver medal performance in 2010.”

“Affordability is the biggest factor over the longer term,” Muir added in an interview, “because home prices in markets such as Victoria and Vancouver are trending on record levels, and mortgage rates are likely to edge higher at the end of this year and through 2011.

“That’s going to increase the carrying cost of housing, and by extension, overall housing demand.”

Home carrying costs, the monthly mortgage payment, taxes and other fees, saw a dramatic trim during the downturn that lasted through the last half of 2008 and first part of 2009, but Muir noted that that advantage is rapidly disappearing.

In his forecast, Muir estimates that the markets that roared back the most in 2009 — Metro Vancouver, the Fraser Valley and Victoria — will be among those with the most muted results in 2010 and 2011.

Some great news! Interest rates are definitely helping. What do you think will happen when interest rates inevitably go up?

VANCOUVER — B.C. home sales in November climbed 165 per cent over the same month last year to 7,182 units, the B.C. Real Estate Association (BCREA) reported Wednesday.

The month reflected the highest number of residential sales for November since 2005, when 7,721 units changed hands.

“Since the beginning of the year, we’ve seen a dramatic rebound in sales in the province, led by Greater Vancouver, Victoria and the Fraser Valley,” BCREA chief economist Cameron Muir said in an interview.

“It’s been driven by first-time buyers getting into the market due to increased affordability and low mortgage rates. A lot of it is because of the pent-up demand that welled up last fall and winter.”

Muir said the elevated sales level in November was largely regional.

“There’s a dichotomy in the province, [with] significant regional differences. There was a very strong seller’s market on the coast, with upward pressure on prices. But in the Okanagan and the Kootenays, the market is now just trending towards balanced conditions, meaning stabilized prices.

“Prices today [in Greater Vancouver, Victoria and the Fraser Valley] are beginning to scratch record levels, but certainly not elsewhere in the province.”

Muir also said that despite the high sales numbers, the BCREA expects consumer demand to moderate in the new year as pent-up demand is largely expended and higher costs erode affordability.

“Going forward, sales levels [in Greater Vancouver, Victoria and the Fraser Valley] will come off their lofty heights as pent-up demand is drawn down. In 2010, sales will more closely reflect the moderate recovery.”

According to a BCREA news release, the year-to-date MLS residential sales dollar volume increased 21 per cent 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 per cent from 2008, while the average price increased two per cent to $463,555.

Greater Vancouver saw a 252-per-cent increase in the number of units sold compared to November 2008, from 889 to 3,133; the Fraser Valley a 192-per-cent increase, from 483 to 1,409; the Okanagan Mainline a 104-per-cent increase, from 219 to 447; and Victoria a 165-per-cent increase, from 2,707 to 7,182.