Category: B.C. Real Estate News

This article appeared on the Vancouver Sun on August 11th, 2011 and was written by Brian Morton.

B.C. home sales rose 12.9 per cent to 6,533 units in July compared to July 2010, while the average price climbed 10 per cent to $541,000, the B.C. Real Estate Association reported Thursday.

However, there was a wide discrepancy in price increases around the province, with Metro Vancouver continuing to show the highest increase.

But price increases in Metro Vancouver are slowing down, and are expected to slow down even further in the coming months.

“In Metro Vancouver, the price numbers have been inflated over the past several months as higher end [single detached] properties selling in pricier neighbourhoods [pushed] the average price higher,” BCREA chief economist Cameron Muir said in an interview. “But this is unlikely to be sustained over the longer term.”

Muir expects the number of single detached homes sold in pricier neighbourhoods like West Vancouver and Vancouver’s west side won’t be as high a proportion as experienced in recent months.

“Three months ago, the average price [in Metro Vancouver] was growing 25 per cent year over year,” he said. “Now, it’s dropped to 16 per cent.”

According to the survey, Metro Vancouver saw a 15.9-per-cent increase in the average price of a residential property in July compared to July 2010, from $658,000 to $762,000. The Fraser Valley recorded a 9.7-per cent increase, from $459,000 to $504,000.

However, the Okanagan Mainline recorded a minuscule 0.5-per-cent increase, from $406,000 to $408,000, while Kamloops saw a 7.6-per-cent decline, from $311,000 to $287,000. Victoria recorded a six-per-cent decline, from $497,000 to $467,000.

Muir noted that housing demand in the near future could be bolstered by lower interest rates as investors flock to bonds and bank analysts predict the Bank of Canada will keep its overnight target rate steady in light of the U.S. Federal Reserve saying it expected that an increase in rates would not be warranted, given the state of the U.S. economy, until 2013.

He said that recent global economic uncertainty means that mortgage rates have the potential to reach record lows in the coming weeks as investors flock into bond markets. “This will mean added purchasing power and affordability for consumers.”

Year-to-date, B.C. residential sales dollar volume increased 16.5 per cent to $28.2 billion, compared to the same period last year. Residential unit sales increased one per cent to 48,628 units, while the average residential price for houses sold through the multiple listings service rose 15.3 per cent to $579,645, BCREA said.

Muir noted that home sales edged down four per cent from June to July on a seasonally adjusted basis. “Less frenetic buying activity in Vancouver operated to pull total provincial sales lower.”

Vancouver, BC – August 11, 2011. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential unit sales in the province rose 12.9 per cent to 6,533 units in July compared to the same month last year. The average MLS® residential price climbed 10 per cent to $540,877 last month compared to July 2010.

“BC home sales edged down 4 per cent from June to July, on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “Less frenetic buying activity in Vancouver operated to pull total provincial sales lower.”

“The silver lining in the recent global economic uncertainty is that mortgage rates have the potential to reach record lows in the coming weeks as investors flock into bond markets,” added Muir. “The increased affordability and added purchasing power from lower mortgage rates will help bolster housing demand.”

Year-to-date, BC residential sales dollar volume increased 16.5 per cent to $28.2 billion, compared to the same period last year. Residential unit sales increased 1 per cent to 48,628 units, while the average MLS® residential price rose 15.3 per cent to $579,645 over the same period.

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This article appeared on the Vancouver Sun on July 16th, 2011 and was written by Bryan Yu.

Provincial home sales recorded a third straight monthly decline in June, falling 2.9 per cent from May to a seasonally-adjusted annualized rate of 70,280 units. In spite of a two-per-cent increase over the same period last year, sales remain weak.

June’s decline largely reflected a 5.5-per-cent drop in Metro Vancouver figures as combined sales in the rest of the province rose 3.8 per cent from May. The largest gains were seen in Kootenay (20.6 per cent), South Okanagan (15.7 per cent) and Chilliwack (16.5 per cent) real estate board regions. In the Okanagan-Mainline region, sales rose 4.2 per cent in June following a 9.4 per cent advance the previous month.

While it’s too early to predict a recovery phase, the outlook for the Okanagan and Kootenay markets has improved slightly. High oil prices continue to boost Alberta’s economy and have led to some of the lowest unemployment rates and the strongest pace of job growth in the country. This could bode well for B.C.’s recreational housing markets over the next few years as discretionary spending picks up.

However, a high Canadian dollar and dramatic price declines in some markets south of the border has made recreational housing in the U.S. a significant competitor for those same dollars.

EXPORTS REBOUND

B.C. exports to international markets rebounded following a drop in April. Total seasonally-adjusted exports rose 17.4 per cent to reach $2.8 billion in May, the highest level seen since late 2008. The underlying trend remains slightly positive (although uneven), but largely reflects higher prices rather than increased physical shipments.

The resource sector led growth in May. Exports of industrial goods and materials reversed April’s 33-percent drop, advancing 27.2 per cent to $562.7 million, while energy exports surged 46 per cent from April to $918.8 million.

There was a sharp rebound in natural gas exports to the U.S. and a 32-percent rise in bituminous coal exports from April, reflecting increased shipments to the U.K, China, Brazil and South Korea.

HOUSING STARTS FALL BACK

Following a 30-per-cent gain in May, led by a jump in multi-family construction, housing starts fell 25.9 per cent in June to a seasonally-adjusted annualized rate of 23,500 units.

In B.C.’s urban areas (which represent about 90 per cent of total activity), multi-family starts declined 36.2 per cent to 14,100 annualized units. Meanwhile, single-detached starts remained flat, dipping 1.4 per cent to 7,100 units.

While June’s monthly decline was relatively steep, month-to-month comparisons of housing starts are volatile, reflecting the large proportion of apartments and other multi-family dwellings that make up the flow of new housing additions in the province, particularly in Metro Vancouver.

VALUE OF MAJOR PROJECTS RISES TWO PER CENT

Estimated first-quarter combined capital costs of major projects under construction in the province rose two per cent to $63.1 billion, according to the B.C. Ministry of Finance. Major projects are defined as those with capital costs of at least $15 million ($20 million in the Lower Mainland).

The bulk of the net gains were observed in the Kootenay ($877 million), Thompson/Okanagan ($624 million) and the Mainland/Southwest ($669 million) development regions. In contrast, completed projects outpaced commencement of new projects in the Northeast by a margin of $600 million and on the Vancouver Island/ Coastal region by $416 million.

Among the 28 major projects that began construction in the first quarter, the highest valued project was the Waneta power plant expansion in Trail, with estimated capital costs of $900 million. Work also started on the Interior Heart and Surgical Centre in Kelowna ($448 million) and the Surrey Memorial Hospital Emergency Department and Critical Care Tower ($512 million).

While the value of total proposed projects in the pipeline dipped by two per cent to $112 billion in the first quarter, 39 major projects with combined capital cost of more than $2.5 billion were added to the list. The largest proposed project was the Telus Garden Communications Centre in Vancouver, a 22-storey office tower and a 44-storey residential tower with an estimated capital cost of $750 million.

Bryan Yu is an economist with Central 1 Credit Union.