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Bank of Canada Interest Rate Decision – September 6, 2017

The Bank of Canada announced this morning that it is raising its target for the overnight rate by 25 basis points to 1 per cent. In the press release accompanying the decision, the Bank noted that recent economic data have been stronger than expected but growth is forecast to moderate in the second half of the year.  On inflation, the Bank cited some excess capacity and temporary price shocks as factors keeping inflation below its 2 per cent target.Importantly, the Bank mentioned it will be paying particular attention to the evolution of the economy’s potential growth rate (meaning the economy’s estimated long-run growth rate) as well as to labour market conditions and the economy’s sensitivity to higher interest rates.

The Bank has now removed the stimulus it injected into the Canadian economy in 2015 to offset the impact of falling oil prices. With the economy expanding at a 3.5 per cent rate over the past year, that stimulus is clearly no longer required. The Bank seems to be more concerned about the potential for higher future inflation due to an over-heated economy than on the actual very low inflation observed in recent months. That leaves the door open for further rate increases should economic growth remain robust.

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August 2017 – Vancouver Real Estate Statistics

Condominium sales drive August activity

Competition for condominiums and townhomes pushed Metro Vancouver* home sales above typical levels in August.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,043 in August 2017, a 22.3 per cent increase from the 2,489 sales recorded in August 2016, and a 2.8 per cent increase compared to July 2017 when 2,960 homes sold.

Last month’s sales were 19.6 per cent above the 10-year August sales average.

“First-time home buyers have led a surge this summer in demand in our condominium and townhome markets,” Jill Oudil, REBGV president said. “Homes priced between $350,000 and $750,000 have been subject to intense competition and multiple offers across the region.”

There were 4,245 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2017. This represents a 1.1 per cent decrease compared to the 4,293 homes listed in August 2016 and a 19.2 per cent decrease compared to July 2017 when 5,256 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,807, a 3.5 per cent increase compared to August 2016 (8,506) and a 4.2 per cent decrease compared to July 2017 (9,194).

For all property types, the sales-to-active listings ratio for August 2017 is 34.6 per cent. By property type, the ratio is 16.3 per cent for detached homes, 44.8 per cent for townhomes, and 76.3 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Conditions in our detached home market are distinct today from the dynamic in our condominium and townhome markets,” Oudil said. “Detached homes have entered a balanced market. This means there’s less upward pressure on prices and that buyers have more selection to choose from and more time to make their decisions.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,029,700. This represents a 9.4 per cent increase over August 2016 and a one per cent increase compared to July 2017.

Sales of detached properties in August 2017 reached 901, a 26 per cent increase from the 715 detached sales recorded in August 2016. The benchmark price for detached properties is $1,615,100. This represents a 2.2 per cent increase from August 2016 and a 0.2 per cent increase compared to July 2017.

Sales of apartment properties reached 1,613 in August 2017, a 20.1 per cent increase compared to the 1,343 sales in August 2016. The benchmark price of an apartment property is $626,800. This represents a 19.4 per cent increase from August 2016 and a 1.7 per cent increase compared to July 2017.

Attached property sales in August 2017 totalled 529, a 22.7 per cent increase compared to the 431 sales in August 2016. The benchmark price of an attached unit is $778,300. This represents a 12.8 per cent increase from August 2016 and a 1.9 per cent increase compared to July 2017.

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Vancouver Real Estate Statistics – July 2017

July Statistics - REMAX Vancouver

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 2,960 in July 2017, an 8.2 per cent decrease from the 3,226 sales recorded in July 2016, and a decrease of 24 per cent compared to June 2017 when 3,893 homes sold.

Last month’s sales were 0.7 per cent above the 10-year July sales average.

“Housing demand is inconsistent across the region right now. Pockets of the market are still receiving multiple offers and others are not. It depends on price, property type, and location,” Jill Oudil, REBGV president said. “For example, it’s taking twice as long, on average, for a detached home to sell compared to both townhomes and condominiums.”

There were 5,256 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in July 2017. This represents a 0.3 per cent increase compared to the 5,241 homes listed in July 2016 and an 8.1 per cent decrease compared to June 2017 when 5,721 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 9,194, a 10.1 per cent increase compared to July 2016 (8,351) and an eight per cent increase compared to June 2017 (8,515).

“Because home sale activity decreased to more historically normal levels in July, the selection of homes for sale in the region was able to edge above 9,000 for the first time this year,” Oudil, said.

For all property types, the sales-to-active listings ratio for July 2017 is 32.2 per cent. By property type, the ratio is 16.9 per cent for detached homes, 44.9 per cent for townhomes, and 62 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,019,400. This represents an 8.7 per cent increase over July 2016 and a 2.1 per cent increase compared to June 2017.

Sales of detached properties in July 2017 reached 949, a decrease of 11.9 per cent from the 1,077 detached sales recorded in July 2016. The benchmark price for detached properties is $1,612,400. This represents a 1.9 per cent increase from July 2016 and a 1.5 per cent increase compared to June 2017.

Sales of apartment properties reached 1,468 in July 2017, a decrease of 8.4 per cent compared to the 1,602 sales in July 2016. The benchmark price of an apartment property is $616,600. This represents an 18.5 per cent increase from July 2016 and a 2.7 per cent increase compared to June 2017.

Attached property sales in July 2017 totalled 543, a decrease of 0.7 per cent compared to the 547 sales in July 2016. The benchmark price of an attached unit is $763,700. This represents an 11.9 per cent increase from July 2016 and a 2.4 per cent increase compared to June 2017.

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Vancouver Real Estate Statistics – May 2017

Market activity picks up in May

Home buyer activity returned to near record levels across the Metro Vancouver housing market in May.

Residential property sales in the region totalled 4,364 in May 2017, a decrease of 8.5 per cent from the 4,769 sales in May 2016, an all-time record, and an increase of 22.8 per cent compared to April 2017 when 3,553 homes sold.

Last month’s sales were 23.7 per cent above the 10-year May sales average and is the third-highest selling May on record.

“Demand for condominiums and townhomes is driving today’s activity,” Jill Oudil, Real Estate Board of Greater Vancouver (REBGV) president said. “First-time buyers and people looking to downsize from their single-family homes are both competing for these two types of housing.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,044 in May 2017. This represents a 3.9 per cent decrease compared to the 6,289 units listed in May 2016 and a 23.2 per cent increase compared to April 2017 when 4,907 homes were listed.

The month-over-month increase in new listings was led by detached homes at 27.1 per cent, followed by apartments at 22.7 per cent and townhomes at 14.1 per cent.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,168, a 5.7 per cent increase compared to May 2016 (7,726) and a 4.5 per cent increase compared to April 2017 (7,813).

“Home buyers are beginning to have more selection to choose from in the detached market, but the number of condominiums for sale continues to decline,” Oudil said.

The sales-to-active listings ratio across all residential categories is 53.4 per cent. By property type, the ratio is 31 per cent for detached homes, 76.1 per cent for townhomes, and 94.6 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“While sales are inching closer to the record-breaking pace of 2016, the market itself looks different. Sales last year were driven by demand for single-family homes. This year, it’s clear that townhomes and condominiums are leading the way,” said Oudil. “It’s important to work with your local REALTOR® to understand the different factors affecting the market today.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $967,500. This represents an 8.8 per cent increase over May 2016 and a 2.8 per cent increase compared to April 2017.

Sales of detached properties in May 2017 reached 1,548, a decrease of 17 per cent from the 1,865 detached sales recorded in May 2016. The benchmark price for a detached property is $1,561,000. This represents a 3.1 per cent increase over May 2016 and a 2.9 per cent increase compared to April 2017.

Sales of apartment properties reached 2,025 in May 2017, a decrease of 5.8 per cent compared to the 2,150 sales in May 2016.The benchmark price for an apartment property is $571,300. This represents a 17.8 per cent increase over May 2016 and a 3.1 per cent increase compared to April 2017.

Attached property sales in May 2017 totalled 791, an increase of 4.9 per cent compared to the 754 sales in May 2016. The benchmark price for an attached property is $715,400. This represents a 13.1 per cent increase over May 2016 and a 1.9 per cent increase compared to April 2017.

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Greater Vancouver Real Estate Statistics – April 2017

Condominiums and townhomes in high demand across Metro Vancouver

Demand for condominiums and townhomes continues to drive the Metro Vancouver* housing market.

Residential property sales in the region totalled 3,553 in April 2017, a 25.7 per cent decline compared to April 2016 when 4,781 homes sold and a 0.7 per cent decrease from the 3,579 sales recorded in March 2017.

April sales were 4.8 per cent above the 10-year average for the month.

For the first four months of the year, condominium and townhome sales have comprised a larger percentage of all residential sales on the Multiple Listing Service® (MLS®) in Metro Vancouver. Over this time, they’ve accounted for 68.5 per cent, on average, of all residential sales. This is up 10 per cent from the 58.2 per cent average over the same period last year.

“Our overall market is operating below the record-setting pace from a year ago and is in line with historical spring levels. It’s a different story in our condominium and townhome markets,” Jill Oudil, Real Estate Board of Greater Vancouver (REBGV) president said. “Demand has been increasing for months and supply is not keeping pace. This dynamic is causing prices to increase and making multiple offer scenarios the norm.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,907 in April 2017. This represents a decrease of 19.9 per cent compared to the 6,127 units listed in April 2016 and a three per cent increase compared to March 2017 when 4,762 properties were listed.

The total number of residential properties currently listed for sale on the MLS® system in Metro Vancouver is 7,813, a 3.5 per cent increase compared to April 2016 (7,550) and a three per cent increase compared to March 2017 (7,586).

The sales-to-active listings ratio for April 2017 is 45.5 per cent for all property types. This is two per cent below March 2017 and is indicative of a sellers’ market. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

By property type, the sales-to-active listings ratio is 26 per cent for detached homes, 58.2 per cent for townhomes, and 82.2 per cent for condominiums.

“Until more entry level, or ‘missing middle’, homes are available for sale in our market, we’ll likely continue to see prices increase,” Oudil said. “There’s been record building this past year, but much of that inventory isn’t ready to hit the market.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $941,100. This represents a five per cent increase over the past three months and an 11.4 per cent increase compared to April 2016.

Over the last three months, the benchmark price of condominiums has seen the largest increase in the region at 8.2 per cent, followed by townhomes at 5.3 per cent, and detached homes at 2.8 per cent.

“Home buyers are looking to get into the market and they’re facing fierce competition,” Oudil said. “It’s important to work with your local Realtor to help you navigate today’s marketplace.”

Sales of detached properties in April 2017 reached 1,211, a decrease of 38.8 per cent from the 1,979 detached sales recorded in April 2016. The benchmark price for detached properties is $1,516,500. This represents an 8.1 per cent increase over the last 12 months and a 1.8 per cent increase compared to March 2017.

Sales of apartment, or condominium, properties reached 1,722 in April 2017, a decrease of 18.3 per cent compared to the 2,107 sales in April 2016.The benchmark price of an apartment property is $554,100. This represents a 16.6 per cent increase over the past 12 months and a 3.1 per cent increase compared to March 2017.

Attached, or townhome, property sales in April 2017 totalled 620, a decrease of 10.8 per cent compared to the 695 sales in April 2016. The benchmark price of an attached unit is $701,800. This represents a 15.3 per cent increase over the past 12 months and a 2.4 per cent increase compared to March 2017.

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Bank of Canada Interest Rate Announcement – April 12, 2017

The Bank of Canada announced this morning that it is holding the target for its overnight rate at 0.5 per cent. In the press release accompanying the decision, the Bank noted that economic growth has been faster than previously expected, boosted by what the Bank sees as temporary spending from the oil and gas recovery and a boost to consumer spending by the Canada Child Benefit. However, export growth remains challenged and business investment is low. Therefore, the Bank judges that it is too early to conclude that the economy has turned a corner.  In addition, CPI inflation is trending below its 2 per cent target while the Bank’s three new measures of core inflation continue to drift lower.

That downward trending inflation, along with uncertainty in United States policy,  seems to be the main barriers keeping the Bank from raising its benchmark overnight rate. While there is some remaining slack in the economy, as measured by the output gap, the Canadian economy has been growing well above the Bank’s estimate of potential growth (1.5 per cent) for three consecutive quarters including a first quarter 2017  in which available data points to above 4 per cent growth.  In addition to strong GDP numbers, the economy is adding jobs at a rate of 35,000 per month over the past six months, the highest level of job growth since 2010. Should this momentum continue, it is likely we will begin to see a more hawkish Bank of Canada in the second half of the year and a first rate increase in early 2018. 
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March 2017 Vancouver Real Estate Statistics

Demand for homes continues to outpace supply in Metro Vancouver

A shortage of residential property listings coupled with strong demand, particularly for condos and townhomes, continued to impact Metro Vancouver’s housing market in March.

Residential property sales in the region totalled 3,579 in March 2017, a decrease of 30.8 per cent from the 5,173 sales recorded in record-breaking March 2016 and an increase of 47.6 per cent compared to February 2017 when 2,425 homes sold.

Last month’s sales were 7.9 per cent above the 10-year sales average for the month.

“While demand in March was below the record high of last year, we saw demand increase month-to-month for condos and townhomes,” Jill Oudil, Real Estate Board of Greater Vancouver (REBGV) president said. “Sellers still seem reluctant to put their homes on the market, making for stiff competition among home buyers.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,762 in March 2017. This represents a decrease of 24.1 per cent compared to the 6,278 units listed in March 2016 and a 29.9 per cent increase compared to February 2017 when 3,666 properties were listed.

This is the lowest number of new listings in March since 2009.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 7,586, a 3.1 per cent increase compared to March 2016 (7,358) and a 0.1 per cent decrease compared to February 2017 (7,594).

The sales-to-active listings ratio for March 2017 is 47.2 per cent, a 15-point increase over February. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Home prices will likely continue to increase until we see more housing supply coming on to the market,” Oudil said.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $919,300. This represents a 0.8 per cent decrease over the past six months and a 1.4 per cent increase compared to February 2017.

Sales of detached properties in March 2017 reached 1,150, a decrease of 46.1 per cent from the 2,135 detached sales recorded in March 2016. The benchmark price for detached properties is $1,489,400. This represents a 5.0 per cent decrease over the past six months and a one per cent increase compared to February 2017.

Sales of apartment properties reached 1,841 in March 2017, a decrease of 18.3 per cent compared to the 2,252 sales in March 2016.The benchmark price of an apartment property is $537,400. This represents a 5.2 per cent increase over the past six months and a 2.1 per cent increase compared to February 2017.

Attached property sales in March 2017 totalled 588, a decrease of 25.2 per cent compared to the 786 sales in March 2016. The benchmark price of an attached unit is $685,100. This represents a 1.3 per cent increase over the past six months and a 1.4 per cent increase compared to February 2017.

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Canadian Housing Starts – March 8, 2017

Canadian housing starts were essentially flat compared to January, albeit up slightly to 210,207 units at a seasonally adjusted annual rate (SAAR) in February. The six-month trend in Canadian housing starts continues to rise with new home construction on a 204,700 unit pace

In BC, total housing starts were slowed substantially by snowfall in February which prompted starts to decline 45 per cent year-over-year  Single detached starts were down 24 per cent while multiple unit starts were down 51 per cent year-over-year. We expect that construction will pick up significantly with the onset of spring.

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA were down 52 per cent year-over-year as unusually snow conditions slowed the pace of homebuilding. In the Victoria CMA, housing starts fell 5 per cent year-over-year, though starts of single detached units actually increased by 20 per cent. New home construction in the Kelowna CMA declined 29 per cent compared to last year due to a drop in multiple unit starts. Housing starts in the Abbotsford-Mission CMA fell 89 per cent as weather conditions halted most new construction.

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RBC – Financial Markets Monthly – 3 March 2017

RBC Financial Market Monthly

We are two months into 2017 and economic data continue to signal good momentum in advanced economies much to the relief of forecasters following years of “serial disappointment”. Europe in particular is seeing its share of upside surprises. Economic sentiment in the euro area remains at cycle highs and purchasing managers’ index readings broke above recent ranges in February. Somewhat unexpectedly, the greatest improvement has been seen in France―despite heightened political risk. While the recent trend in the data is encouraging, we remain wary that uncertainty surrounding a number of elections could dampen economic activity. UK data have remained strong early in the year after the economy dramatically outperformed expectations in H2/16 post-referendum. Indicators have been a bit more balanced in Canada, growth and employment numbers have been strong but underlying details (weak in- vestment and flat non-energy exports) continue to highlight challenges facing the economy. The Bank of Canada remains cautious given risks posed by potential changes in US policy.

A strong US outlook, with upside surprises on employment and inflation, seems to have shifted the Fed toward a ‘sooner than later’ mentality on monetary policy comments from a number of Committee members point to a March rate hike. Markets took that shift in stride, with US Treasury yields remaining within recent ranges while equity markets continued to rally (to record highs for the S&P 500 and MSCI World Index on March 1) despite the expectations of tighter monetary policy. The prospect of fiscal stimulus in the US continues to buoy stocks even as details remain sparse and challenges for the passage of policy changes rise, while investors seemingly dismiss downside risks from protectionist trade policies.

Call or email me for the full RBC report – 778 385 6141 or adam@chahl.com

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Vancouver Real Estate Statistics – February 2017

Low supply continues to limit Metro Vancouver home buyers

Reluctance amongst Metro Vancouver* home sellers is impacting sale and price activity throughout the region’s housing market.

Residential home sales in the region totalled 2,425 in February 2017. This is a 41.9 per cent decrease from the record 4,172 homes sold in February 2016 and an increase of 59.2 per cent compared to January 2017 when 1,523 homes sold.

Last month’s sales were 7.7 per cent below the 10-year February sales average.

“February home sales were well below the record-breaking activity from one year ago and in line with our long-term historical average for the month,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president said. “Limited supply and snowy weather were two factors hampering this activity.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 3,666 in February 2017. This represents a 36.9 per cent decrease compared to the 5,812 units listed in February 2016 and an 11.4 per cent decrease compared to January 2017 when 4,140 properties were listed.

This is the lowest number of new listings registered in February since 2003.

The total number of properties currently listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver is 7,594, a four per cent increase compared to February 2016 (7,299) and a 4.9 per cent increase compared to January 2017 (7,238).

The region’s sales-to-active listings ratio for February 2017 is 31.9 per cent, a 10-point increase from January. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“While home sales are not happening at the pace we experienced last year, home seller supply is still struggling to keep up with today’s demand. This is why we’ve seen little downward pressure on home prices, particularly in the condominium and townhome markets,” Morrison said.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $906,700. This represents a 2.8 per cent decrease over the past six months and a 1.2 per cent increase compared to January 2017.

Sales of detached properties in February 2017 reached 745, a decrease of 58.1 per cent from the 1,778 detached sales recorded in February 2016. The benchmark price for detached properties is $1,474,200. This represents a 6.5 per cent decrease over the past six months and is unchanged compared to January 2017.

Sales of apartment properties reached 1,275 in February 2017, a decrease of 28.8 per cent compared to the 1,790 sales in February 2016.The benchmark price of an apartment property is $526,300. This represents a 2.3 per cent increase over the past six months and a 2.7 per cent increase compared to January 2017.

Attached property sales in February 2017 totalled 404, a decrease of 33.1 per cent compared to the 604 sales in February 2016. The benchmark price of an attached unit is $675,500. This represents a 0.3 per cent decrease over the past six months and a 1.3 per cent increase compared to January 2017.