Housing trends in Vancouver are hardly typical.

Latest analysis by the real estate economists revealed that although the number of property sales “will ease over the period of 2010 by 3%, their prices will still climb by around 6%.”

This is an unusual trend, and once again shows a very peculiar character of Vancouver housing market.

Typically, when the number of sales goes down so do the prices. At least they adjust to the level of higher affordability for buyers, especially when a lot of property owners compete to sell within the same local area. Combined with an upward trend in mortgage rates, in normal conditions the market should adjust prices in favor of buyers. However, economists add that there only will be a “lesser upward pressure on home prices.”

In summary, demand in Vancouver housing remains so strong that it is highly unlikely that property prices will take somewhat of a plunge, and make housing gradually more affordable. Thus, new developments will still remain too pricey for the majority of people to purchase in. This of course is unfortunate. 

Full report here.

Mortgage rates are going up.

As the mortgage rates became all time low in the last two years, a lot of home buyers were obtaining their mortgages at a variable rate, while waiting for the best time to fix their mortgage rate at the right time.  On March 29, 2010 mortgage report states that three major Canadian banks (Toronto Dominion, Royal bank, and Laurentian Bank) are increasing their rates on some mortgages, due to fluctuations in funding.

“The biggest increase announced Monday affects five-year mortgages. All three banks are hiking their posted rate by six-tenths of a per cent to 5.85 per cent from 5.25 per cent. A homeowner taking on a mortgage of $250,000 at the new posted rate of 5.85 per cent over a 25-year amortization period would pay $1,577 per month. Prior to Tuesday’s hike, that mortgage would have cost $1489 a month, or $88 less.”

The Central Bank was previously expected to increase its rates in July, but it seems that it might becoming sooner than that. The increase  in the prime rate is predicted to be around 0.75 – 1%. Economists’ recommended strategy is as follows:

“Potential homebuyers should get their pre-approval applications in fast and expect delays in pre-approvals due to increased application volumes, he said. And homeowners’ with mortgages up for renewal would also be wise to lock in rates as far in advance as possible.” (Read more).

BC prices are to lower to ~5% in 2010/2011.

Government action plan for Canada housing.

While Vancouver housing remains highly unaffordable for most local residents, Canadian government came up with a few step to stimulate housing across country. Under the general economic action plan, government officials came up with the following steps concerning our housing market:

• “The tax relief available through the temporary Home Renovation Tax Credit of up to $1,350 is providing an immediate incentive for homeowners to invest in their homes and is supporting jobs in the housing industry.
• Tax relief of up to $750 through the First-Time Home Buyers’ Tax Credit and higher Home Buyers’ Plan withdrawal limits will encourage home ownership and further support the housing industry.
• More than 945 projects have begun as a result of agreements with all provinces and territories to deliver $650 million in federal investment in 2009–10 for the construction, renovation and retrofits of social housing across Canada.
• $1 billion in low-cost loans is available for municipalities in 209–10 to undertake housing-related infrastructure projects. 64 loans have already been approved.
• The federally administered renovation and retrofit initiative is also investing $75 million in 2009–10 to improve existing social housing units. 420 projects have already begun.
• Projects have begun to build and renovate on-reserve social housing in almost 300 First Nations communities. In addition, federal investments are creating jobs and supporting communities in the North, with 106 projects already started.
• Due to unprecedented demand under the ecoENERGY Retrofit – Homes program, the Government is proposing to allocate $205 million under the Clean Energy Fund to finance up to 120,000 additional retrofits for Canadian homeowners.” (http://www.actionplan.gc.ca/eng/feature.asp?featureId=4)

View: While having some kind of aid from the government is great, we can  hope that more can be done to make housing more affordable, especially in the province of British     Columbia.  There are still speculations as to what is going to happen to Vancouver’s market after the completion of the Olympics 2010, and these views are divided between those who believe that prices will be rising further and those who believe they will decline. But we all will have to just wait and see what happens.

What’s more important, however, is for our market to stabilize in such a way which would make it less prone to sharp price fluctuations,  while allowing more Canadians to own their homes.

December Sales – second highest on record.

December 2009 was marked by a sharp increase in real estate sales throughout the BC province. Statisticians report that

MLS sales climbed 132 per cent to 5,703 units in December compared to the same month last year. More homes were sold last month than in any December on record except 1989 when 6,014 units were sold.

It is expected that housing market will be very active in the first quarter of 2010, and will remain strong throughout the whole year.  There is still a lot of speculation as to what is going to happen right after the Olympics 2010, however the numbers are strong and  demand amongst home buyers is expected to raise.

Market Forecast for 2010 looks promising.

The unfolding of the economic recovery is predicted to be gradual, with a considerable increase in the year 2010.  “British Columbia’s residential sales are estimated to increase 20 per cent to 82,900 units this year from 68,923 units in 2008. Residential sales in 2010 are forecast to increase a further 8 per cent to 89,600 units.”

Prices for the residential properties are also expected to set a new high in 2010, with a predicted increase of  and additional 4% compared to 2009. To view statistics of this forecast, go to CREA’s full report page.

 

Moving back to sellers’ market?

Vancouver real estate market has witnessed a very strong demand from property buyers over the summer period, and has been steadily increasing ever since. According to the latest report (Oct. 15) from BC Real Estate Association:

“Low mortgage interest rates and renewed confidence in real estate assets has propelled BC home sales to a level not seen in two years.” September posted the highest number of BC MLS® residential sales for that month since September 2005, and the third highest ever recorded for the month of September.” Read full report here.

The rest of the provinces experience a more gradual, but still steady growth of the property sales. Once again, Vancouver proves to have a rather unique real estate market with an ability to effectively navigate through the low and high cycles in the economy.

Feature property: Coopers Pointe

Developed by Concord Pacific, Coopers Pointe offers a modern living in one of the best locations in Yaletown Vancouver. Completed in 2007, this concrete tower is situated right on the downtown waterfront, surrounded by parks, seawall, and great restaurants. The size of condos, townhomes, and penthouses in Coopers Pointe range from 720 sqft to 1193 sqft. Designed as a higher end development, its home features include stainless steel appliances, granite countertops in kitchens and bathrooms, ceramic and carpeted tile flooring (with an option for hard wood upgrade), and video screened visitor entry.

Amenities in the buildings are worth a special mentioning. Gathered under the name of Esprit City Club, amenities include a private 10-pin bowling alley, SPA, yoga studio, lap pool, theater and club concierge.

Current price (October 2009) on the market:

• 1-bdrm condo (729 sq.ft) is $469,000
• 2-bdrm condo (1,140 sq.ft) is $788,000

No restrictions on pets and rentals exist under current by-laws.

THE GOOD: Proximity to the waterfront is probably the best feature of this building, which allows for gorgeous water and city views. If you are into sports and music concerts, then you will also enjoy living very close to the GM Place and Stadium which the majority of the big events in Vancouver. When I visited a few properties in this tower, I really liked the spacious layouts of the condos. The exterior of the tower looks very attractive, with some dark red color added for a nice contrast with glass and concrete. Esprit City Club is a big plus, since residents can enjoy all its features alone or with their friends while staying close to home. In addition, Concord did a great job landscaping the surrounding area which takes the tower out of the “concrete jungle” category.

THE BAD: The only thing worth mentioning as negative in this development is its closeness to the Cambie bridge. Some of the units are extremely close to the bridge, and you can almost reach out to cars which are constantly passing by. Needless to say, it significantly interferes with quiet living and beautiful views from every room.

August Home Sales (CREA) Report.

Luxury property: Shangri La Vancouver

One of the most prestigious high rise developments in Vancouver, Shangri La is a beautiful 62 storey residential tower located at 1120 West Georgia Street. Its prime downtown location offers such conveniences as Urban Fare grocery store locate don the street level right underneath the development. Shangri La is also surrounded by some of the best restaurants in the city, such as the Market and Italian Kitchen, as well high end boutiques including Louis Vuitton, Tiffany&Co, Agent Provocateur, and many others.

Completed in 2008, this development released a total of 300 high end condominiums. Their size ranges from small 590 sqft to enormous 5814 sqft (penthouse). being a luxury development, the features are very upscale, including marble and hard wood flooring, extra high ceilings, energy conserving heating and air conditioning, as well as Miele kitchen appliances to mention just a few. Shangri La’s amenities are indoor pool and hot tub, valet parking, SPA services at a discounted rate to its residents, media and library rooms, extra large fitness center, and limousine service.

Current market prices (Sept. 2009):

• 2-bdrm (2,433 sq ft) condo – $2,480,000.
• 3-bdrm (4,470 sq ft) condo – $5,690,000.

Current by-laws permit pets and rentals with no restrictions.

THE GOOD: Shangri La is a beautiful addition to Vancouver residential architecture. Its sleek and ergonomic design offers luxurious features and extra large sized residences to those who want to have a lot of space while still living right in the heart of the downtown area. Its amenities cover everything that is needed by an urban professional, including gym, SPA, and conference space for private meetings. No pet and rental restrictions are great. Most importantly, Shangri La landscapers did a great job with creating a green space right at the entrance of the tower.

THE BAD: With all its luxuries, this development is beyond affordability even for many of those who are considerably well off. A lot of condos in Shangri La are bought by foreign affluent investors, and either rented out or serve as their second residence. Also, since it is located in the midst of the downtown business district, this is not the quietest place to live in. On a humorous note, you also better be not afraid of the heights if you are thinking of buying on the higher floors of this tower.