Robert Moore

604-506-8965
 

What to Expect in 2017!

In 2016, we had a record breaking first half of the year and then a shift in the opposite direction for the last half. In Greater Vancouver there were 26,439 properties sold in the first six months and 14,441 sales in the last six months of 2016. So while demand declined through the last half of the year, an accumulation of listings for sale did not happen. 

 

Greater Vancouver is Very Much a Regional Market

Not just in regional or geographic terms but by price range and by home type. Vancouver is a diverse market with all types of housing and prices ranging very widely. 

 

Here is my Prediction for 2017 

Supply to remain restricted and that will change very slowly. Detached housing will continue its gradual decline leveling off in the spring, but not really reaching a balanced market. Strata title properties to experience strong demand with price increases due to short supply. BC's economy is strong and diverse. Constuction is booming.  With 300,000 immigrants entering Canada each year, most end up in Ontario or BC. There is little any government can do about property prices in Greater Vancouver without increasing the supply of buildable land.

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Insights for one of the Most Interesting Real Estate Markets in the World. 

 

With sales volumes being down 37% consistently for the past 5 months does this mean that foreign buyers have been accountable for about 37% of all sales? Definitely not. For the most part,  buyers have taken a wait and see approach, sitting on the fence as a result of government intervention and because of the unprecedented run up in sales volumes and market value increases over the the first half of 2016, all of 2015 and part of 2014. It’s believed that foreign buyers have been accountable for something more like 10% of all sales but, this varies significantly by area and by price range. Obviously the high end in West Vancouver, Coal Harbour or Yaletown or homes in Point Grey for example saw more foreign buyer activity than places like East Vancouver or North Vancouver.  

 

Detached Homes:

657 single family detached homes sold in November, of these, 74 homes sold above the asking price. The House Price Index (for all of Greater Vancouver) is down 1 per cent month over month for Greater Vancouver and down 3 per cent over the past 3 months. West Vancouver is showing the biggest decline with the House Price Index down 10 per cent over the last 3 months. 

 

Attached Homes:

1589 condos, townhouses and 1/2 duplexes sold in November, of these 332 sold above the asking price.  Prices have remained stable, or flat, for townhouses, apartments and 1/2 duplexes. 

 

New Listings:

Sales volumes in East Vancouver were actually 25 per cent higher in November compared to October. And while the number of sales have held steady for November, the number of new listings coming on market in most areas are down for November compared to October as well down from November 2015. The result is a dropping Active Listing count – finishing in November at 9,051 listings compared to 9,826 at the end of October. The number of new listings coming on market was 10.5 per cent below the average for November going back to 1991. 

 

Overall:

Distraction can have its effects on markets and that has certainly been the case for Metro Vancouver and beyond. Perhaps the pull back in demand, that actually started before the Foreign Buyer Tax, mortgage rule changes and the new City of Vancouver Vacant Home Tax announcement, had more to do with the market reacting to its own conditions than those imposed by the government.

 

Generally speaking, look for 2017 to be a normal year for the Metro Vancouver housing market with supply and demand being closer to balanced conditions but supply still remaining low. While detached homes are currently seeing a modest month-over-month decline, its still hard to predict how long this will continue. Attached housing will outperform detaching housing for the foreseeable future but then take into account that 2017 and 2018 will see more new condo completions than we saw in 2015 and 2016. Yet again, many of the new buildings coming to completion are expensive and they are not large buildings. Just look at all the main east/west arteries across the city for evidence of boutique sized buildings. 

 

Growth in the total active listings count would be a healthy for the market as it would create opportunities for new buyers to enter the market.  One thing is certain, there is a lot of confidence in our market. Canada's immigration policy, Vancouver’s position within the global marketplace, that the Vancouver Real Estate Board is a recognized leader in North America and that our MLS system provides buyers and sellers with transparency and visibility are all fundamental to the confidence and stability that a proper functioning market needs. 

 

If you’d like more information on the current value of your home or homes in other neighborhoods, you are welcome to call me anytime. Thank you very much! 

 

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November 2016 Market Update: 

Have you ever had to compete when buying a home with other buyers? Good chance the answer is yes. Read on!

 

In Greater Vancouver we had a grand total of 2,233 sales for all housing types in October, 2016 or a decline of 38.8% compared to 3,646 sales for October 2015. The slow down in trading volumes is in response to the record sales volumes during the first half of this year and significant increases in home values. Sales for the month of October were 13% below the 25 year average while New Listings for October were 11 percent below the 25 year average. 


The market update below shows how many properties SOLD for or above the asking price in October 2016 versus October 2015. 

 

VANCOUVER - WEST SIDE HOMES SALES 

2015 – October - Detached

  • 164 detached homes SOLD
  • 59 homes or 36% SOLD for or above the asking price 

 2016 – October - Detached

  • 79 detached homes SOLD
  • 14 homes or 18% SOLD for or above the asking price

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 2015 – October – Attached (excluding all downtown areas)

  • 249 condos, townhouses, duplexes SOLD
  • 95 homes or 38% SOLD for or above the asking price 

2016 – October – Attached (excluding downtown areas)

  • 167 condos, townhouses, duplexes SOLD
  • 74 homes or 44% SOLD for or above the asking price 

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 DOWNTOWN, YALETOWN, WEST END & COAL HARBOR 

  2015 – October - Attached

  • 284 condos, townhouses, duplexes SOLD
  • 122 homes or 43% SOLD for or above the asking price 

2016 –October - Attached

  • 165 attached condos and townhouses SOLD
  • 48 homes or 29% SOLD for or above the asking price 

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 EAST VANCOUVER HOME SALES

2015 – October - Detached

  • 149 detached homes sold
  • 82 homes or 55% SOLD for or above the asking price 

2016 – October - Detached

  • 66 detached homes SOLD
  • 22 homes or 33% SOLD for or above the asking price

—————————————————

 2015 – October - Attached

  • 205 condos, townhouses, duplexes SOLD
  • 103 homes or 50% SOLD for or above the asking price 

2016 – October - Attached

  • 138 condos, townhouses, duplexes SOLD
  • 72 homes or 52% SOLD for or above the asking price

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NORTH VANCOUVER HOME SALES

2015 – October - Detached

  • 129 detached homes SOLD
  • 50% of homes SOLD for or above the asking price

2016 – October - Detached

  • 62 detached homes SOLD
  • 14 homes or 23% SOLD for or above the asking price

————————————————

 2015 – October - Attached

  • 159 condos, townhouses, duplexes SOLD
  • 36% of homes SOLD for or above the asking price 

2016 – October - Attached

  • 106 condos, townhouses, duplexes SOLD
  • 50 homes or 47% SOLD for or above the asking price 

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WEST VANCOUVER HOME SALES

2015 – October - Detached

  • 115 detached homes SOLD
  • 22 homes or 19% SOLD for or above the asking price 

2016 – October - Detached

  • 24 detached homes SOLD
  • 3 homes 13% of homes SOLD for or above the asking price

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Homes sell above the asking price either because they are sharply priced, they have all the right stuff or because of a supply shortage. Often all of the above. 

 

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September 2016 Update

The detached housing market continues to be slower than the attached housing market. Sales of detached homes in September represented 29% of all sales for all housing types compared to 38% in September 2015 and to 42% at the peak of our market last February / March 2016. 

 

Government Intervention

What the 15% foreign buyer tax has done and will do is accelerate a market normalization. Each week there seems to be a new government measure to ease pressure on the real estate market followed by a media feeding frenzy. Our real estate markets were normalizing even before the 15% Foreign Buyer tax came into effect.

 

New mortgage qualification rules introduced by Ottawa this week mean that buyers who take out an insured mortgage (a downpayment of 20% or less) will now have to qualify based on the “Posted 5 YR Qualifying Rate” (presently 4.64%) instead of the actual mortgage lending rate. 

 

Vacancy Rates and Short Term Rentals

This summer, New York City passed a bylaw completely banning Airbnb and other short term rentals. San Francisco has just imposed strict new rules and fines on owners who engage in Airbnb and other short term rentals. City of Vancouver will create an audit task force which will allow the City to declare victories against home owners who allow the property to sit empty or who engage in short term rentals of 30 days or less. 

 

British Columbia 

We still enjoy the strongest performing economy in Canada, with a diversified base of economic activity – film production, tourism, strong retail sales, a strong high tech sector, etc. The homeownership rate continues to climb in Metro Vancouver, and population growth is consistent. New home permit applications are at record levels right now and vacancy rates are at record low levels. By 2041, only 10% of housing stock in Vancouver will be single detached homes compared to 28% in 2011. 

 

The Future

Our market has been in overdrive for 2 years with all types of buyers being active in all market segments and all housing types. What to expect now?  Fewer buyers at the high end of the market and now new price sensitivity at the low end of the market as a result of Ottawa’s changes this week.  Once the high end of our market; (about $4 million and up) corrects by about 15% to 20%, some foreign buyers, now on the sidelines, will come back. 

 

Government is a Big Part of the Cost

New real estate developments and master planned communities will continue to be green, green and more green, making them very very expensive. The total municipal, provincial and federal government tax haul and permit fees on all new condo developments represents about 30% of the cost of a typical $500,000 condo. Vancouver has 103 different permits, taxes and fees that a developer must pay, ensuring that new housing into the future will be very very expensive. 

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