Category: B.C. Real Estate News

I found this article recently by the Financial Post and thought it was worth posting…..

I’ve been hearing a lot of soothing sounds of late coming from the real estate and construction industries. “All is well,” they seem to say. “Don’t panic,” they encourage.

Two days ago, the Canadian Home Builders’ Association, a lobby group, insisted “there is absolutely no merit” in drawing a parallel between the U.S. real estate meltdown and the “cooling” market we are currently experiencing.

In mid-December, meanwhile, the Canadian Real Estate Association announced that national averages aren’t down as much as previously thought, and that it would be changing the methodology by which it calculates home prices, taking into greater account the rural homes that haven’t depreciated as quickly.

Taken at face value, these recent press releases might suggest that now was a great time to buy a house — a convenient conclusion for home builders and real estate agents.

But don’t you believe them. Maybe it’s appropriate that the CREA is changing its methodology to be more inclusive, but now seems to be an awfully convenient time to be doing so. And while it’s true that the Canadian housing boom was not propelled by the loose lending practices and low interest rates seen in the U.S., that doesn’t mean our boom was any less heated. In Canada, housing prices skyrocketed alongside a commodities boom that brought enormous wealth, in particular to western provinces.

So what do you suppose might happen when such a commodities boom crashes down to earth, as has happened over the last four months? If you’re still not convinced, take a look at the numbers below. They show six years of annual housing prices, leading up to their respective peaks, in the United States, as well as four Canadian cities. Also included are the most recent prices, to give you a sense of how far we’ve come down so far. Numbers are from the U.S. Census Bureau and the CREA — before they decided to revise their methodology.

United States
March 2002 – US$227,600
March 2003 – US$233,100 (2.4%)
March 2004 – US$262,900 (15.5%)
March 2005 – US$288,500 (26.8%)
March 2006 – US$305,300 (34.1%)
March 2007 – US$322,100 (41.5%)

Vancouver
May 2003 – $319,783
May 2004 – $370,545 (15.9%)
May 2005 – $418,757 (31%)
May 2006 – $518,176 (62%)
May 2007 – $591,722 (85%)
May 2008 – $624,639 (95.3%)
Most recent – $510,465

Calgary
July 2002 – $196,472
July 2003 – $209,932 (6.9%)
July 2004 – $220,978 (12.5%)
July 2005 – $245,704 (25.1%)
July 2006 – $357,831 (82.1%)
July 2007 – $436,739 (122.3%)
Most recent – $384,243

Toronto
April 2003 – $292,783
April 2004 – $321,131 (9.7%)
April 2005 – $342,032 (16.8%)
April 2006 – $366,683 (25.2%)
April 2007 – $379,025 (29.5%)
April 2008 – $398,687 (36.2%)
Most recent – $368,582

Montreal
July 2003 – $190,402
July 2004 – $218,313 (14.7%)
July 2005 – $222,972 (17.1%)
July 2006 – $253,420 (33.1%)
July 2007 – $263,018 (38.1%)
July 2008 – $277,703 (45.9%)
Most recent – $263,734

A condo developer in Vancouver who built a number of condominium projects all over the Lower Mainland is liquidating 375 properties at 20%-40% off of assessed value. This recent development is definitely a sign of the times. You have to ask yourself – why are they selling these units at such a discount? Why? Because maybe they see the storm on the horizon. If you owned these units would you discount them if you expected sales prices and activity to increase?

What do you think? Any opinions out there?

Here is the article by CBC…

A Vancouver real estate developer is making an unprecedented move to offer a liquidation sale of $350 million worth of its condominiums throughout the Lower Mainland.

The marketing strategy by Onni Group of Companies is aimed at selling off hundreds of condos in its inventory.

About 375 unsold condominiums in cities such as Richmond and New Westminster will be offered at 20 to 40 per cent off, a real estate insider told CBC News.

It is not known whether the big discounts are based on prices when the condos were completed or current market values. Onni was to hold a media event Thursday to announce details.

Onni’s marketing tool might nudge some reluctant home buyers off the fence, said Tim Silk, an assistant professor at the University of British Columbia’s business school.

“If you see the units being priced below comparable units, then you might see people jump in,” Silk said Wednesday. “But there’s still that hesitation of, ‘Have we reached bottom?’ ”

Home prices in the Vancouver real estate market dropped almost 11 per cent between December 2007 and the end of 2008, according to a special price index updated earlier this month by the Real Estate Board of Greater Vancouver.

And the number of homes sold in 2008 fell more than 35 per cent from 2007 sales of more than 38,000 homes.

Link to CBC Article.

For the 2009 Property Assessment Roll only, BC Assessment will be providing property owners with the market value of properties as of both July 1, 2007 and July 1, 2008. The lower of these two values will become the 2009 assessed value for most properties.

On November 27, 2008, the provincial government passed the Economic Incentive and Stabilization Statutes Amendment Act (Bill 45), which provides special valuation rules for the purpose of the 2009 tax year only. Part 3 of Bill 45 provides that properties valued at market value will, on the 2009 assessment roll, be valued at the actual value calculated using either a July 1, 2007 or July 1, 2008 valuation date, whichever is lower. This initiative is part of the B.C. Government’s economic strategy to provide stability and predictability to British Columbians in response to the downturn in the real estate market which began mid-2008

About 94 per cent of property owners in British Columbia will see an identical or lower assessed value on their 2009 notice compared to 2008. Eighty-two per cent of BC’s 1.85 million properties will reflect last year’s assessed value. Another 12 per cent of properties will be assessed at July 1, 2008 values because that value is lower than July 1, 2007. The remaining six percent have undergone changes that are described online.

If you were wondering if your property taxes were decreasing this is not necessarily the case. BC Assessment does not have a direct role in setting property taxes. Taxing authorities (municipalities, regional districts) set their tax rates for property taxes based on their budget requirements.

For further information or questions about your property assessment visit BC Assessment online here.