Vancouver Real Estate Market Insight

Adds Kyle Green,  investment mortgage broker from Mortgage Alliance (778-373-5441, kgreen@mortgagealliance.com): “National Bank made a big splash on April 16th by completely wiping out their “DCR” program, and instead replacing it with the CMHC’s “50% add-to-income” method.”For those not familiar with the difference between the two, a DCR program was the only reasonable method that a real estate investor could acquire more than 3 properties without an extremely high income.

“I had a good conversation with National Bank’s sales rep, who had been in meetings in Toronto the week prior to the decision, and it was understood that the government has been putting a lot of pressure on banks to reduce their exposure to investors. Not good news. If this continues, we may see clients having to deal with commercial department to build their portfolio, instead of dealing with the residential side. This would have HUGE implications for real estate investors. Larger down payments, higher rates and fees, higher costs. As less lenders service portfolio clients options will continue to become more limited, so if you have been sitting on the fence, now might be the best time to act to get residential financing at less than 3.5% on a rental property.”

(Mortgage Alliance have five-year rates at 3.24% (the posted bank rate is 5.24%) one-rate rates at 2.74% and a variable rate 15 points below the 3% prime rate).

Tought times for Canadian investors. Probably no wonder many real estate investors favor buying distressed properties in Arizona and elsewhere for all cash. Properties in US, whatever view you take of the US economy, represent the deal of a lifetime.

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If anyone has noticed the increasing frequency with which the Bank of Canada is concerned with household debt, then it comes as no surprise that a surreptitious squeeze on borrowing should creep into the mortgage market.

Canada’s Department of Finance has tightened the rules surrounding who can qualify for CMHC-insured mortgages. Moves to shorten the maximum length of the mortgage and raise the minimum percentage a borrower must have as a down payment combined to make CMHC insurance harder to come by. Big banks are currently rejecting as much as 20% of mortgage applications, according to once source, because they don’t qualify for CMHC insurance.

Alternative lenders – such as Home Capital Group, Equitable Group and Counsel Corp – have stepped in to offer mortgages to such borrowers. This sector is not really subprime, but it is close to it, and is estimated to be worth about $85 million now, or about 10% of the mortgage market.

Self-employed people, recent immigrants and those with poor or no credit history are among those going the alternative route.

If you have mortgage and financing related questions in relation to your home purchase and you would like one or more relaibale and knowledgeable mortgage experts to speak to-don’t hesitate to call me (Bruce 778-233-3777)

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I have just listed this beautiful new property in the prestigious Arbutus Walk neighbourhood. First things you will want to know:

• 2 Large Bedrooms, 2 full baths, almost 1100 sq/ft for $6999,500
• Rare (the only) townhome property in prestigious Arbutus Walk
• Private entrance off street and also 2nd entrance from building
• 2 Parking, One Large Locker for Ample Storage
• Award winning building construction – Classic New York Red Brick Style
• High Ceilings, Floor to Ceiling Windows, Modern Paint Colors
• Lovingly maintained and immaculately presented property
• Dark engineeered hardwoods on Main, stainless steel appliances and open plan kitchen
• Pets and Rentals Ok
• Quiet Interior to Property  
• Solid building, great reputation in area, townhomes rarely available 
• 2 minute walk to Connaught Park, 5 minute walk to shops on Broadway & Vine
• This suite features: gas fireplace, insuite laundry, 2 secure parking, lots of two entrances
• MLS # v946921

OPEN HOUSE THIS SATURDAY and SUNDAY MAY 5th & 6th **2 – 4pm**

Showings by appointment: Call Bruce 778-233-3777

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In summary, what I am seeing is less buyers in the market and more homes for sale in the condo market.

I thought the days of multiple offers were in the past-well, clearly not on Main Street-where 12 of the last detached 15 sales have sold OVER asking:  http://tinyurl.com/7ehxzjr

• April sales were the lowest total for the month in the region since 2001 and 16.9 per cent below the 10-year April sales average of 3,369.
• Last month’s new listing total was 6.7 per cent above the 10-year average for listings in Greater Vancouver for April.
• At 16,538, the total number of homes listed for sale on the region’s MLS® increased 8.5 per cent in April compared to last month and increased 16 per cent from this time last year.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $683,800, up 3.7 per cent compared to April 2011 and an increase of 2.8 per cent over the last three months.

Sales of detached properties on the MLS® in April 2012 reached 1,126, a decline of 19.7 per cent from the 1,402 detached sales recorded in April 2011, and a 17.8 per cent decrease from the 1,370 units sold in April 2010. The benchmark price for detached properties increased 6.3 per cent from April 2011 to $1,064,800.

Sales of apartment properties reached 1,190 in April 2012, a decline of 0.9 per cent compared to the 1,201 sales in April 2011, and a decrease of 22 per cent compared to the 1,526 sales in April 2010.The benchmark price of an apartment property increased 1.1 per cent from April 2011 to $375,900.

Townhome property sales in April 2012 totalled 483, a decline of 22.3 per cent compared to the 622 sales in April 2011, and a 21.6 per cent decrease from the 616 townhome properties sold in April 2010. The benchmark price of a townhome unit increased 1.7 per cent between April 2011 and 2012 to $487,300.

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I have just listed this beautiful new property in the heart of  trendy and super convenient “LoLo” …aka Lower Lonsdale !

First things you will want to know:

• 2 Bedrooms PLUS den for $439,000
• Lovingly maintained and immaculately presented property
• Newer flooring, appliances and paint throughout
• Quiet side of the building, spacious balcony and BBQ friendly
• Solid rain screened building, great reputation in area, low turn over of residents
• 5 minute walk to Seabus and one block to Lonsdale – ultra convenient, close to water
• This suite features: gas fireplace, insuite laundry, secure parking, lots of visitor parking, quiet end unit
• MLS # v941848

OPEN HOUSE THIS SATURDAY and SUNDAY APRIL 14th & 15th **2 – 4pm**

Showings by appointment: Call Bruce 778-233-3777

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As of mid-December 2011 some parts of the BC Strata Property Act were modified and/or expanded and will take effect in mid-March, 2012. What effect will they have on strata corporations, how they are run and how strata properties are bought and sold…?

The answer is, a profound effect. The recent changes are certainly the most important ones to come along since the developer Rental Disclosure Statement (RDS) rule change in late 2009 (the effect of which was to divide BC stratas into two separate groups as far as rentals are concerned – Group One being those disclosures filed up to and including December 31, 2009, where an individual strata corporation’s rental bylaws could take precedence over the developer’s RDS and those filed since that date in which stratas cannot overrule a developer’s RDS until it expires). In fact they are probably the most significant rule changes to come down since the Strata Property Act superseded the old Condominium Act about 14 years ago.

The recent rule changes state that every BC strata corporation of greater than 5 units will have to develop and file a common area Depreciation Report every 3 years (beginning on Dec. 13/2013) outlining the current condition of the strata complex and also file and continually update a forward-looking 30-year plan (and budget) for repair, maintenance and upgrades.

A strata corporation will be allowed to exempt itself from these regulations but only by a 3/4 vote of strata owners and each exemption will only be good for 18 months. So you say, “Oh, that’s no big issue; a strata can just keep exempting itself from this silly, onerous and time-consuming task and go merrily on its way.” Not so fast. We all know that many stratas try to postpone maintenance, repairs and upgrades in order to keep their owners happy and strata fees low. Unfortunately this is short-term thinking. Any building, especially in BC’s wet climate, must be kept maintained and in good condition as it will deteriorate very quickly if neglected. So this rule change is being brought in to basically force strata corporations to plan for future maintenance, repairs and upgrades and maintain a healthy contingency fund. (believe it, there are some strata horror stories out there). Also, the revised Form “B” rule will make it mandatory for the relevant Depreciation Report to be attached to it upon the sale of a strata unit. There are also changes that allow for a strata to more easily keep its contingency fund topped up, which again is good for building maintenance.

So what effect will these rule changes have on stratas in BC? Well, firstly, there will be more work for strata councils to do. This may make it harder to get volunteers to sit on council. Secondly, it will make it more expensive for the strata as it will have to hire a professional to complete the DR (and site visits are mandatory). Thirdly, as part of the strata documents that are requested upon a unit purchase, the building’s DR will be at the top of the list and will be under close scrutiny. But what if a particular strata has thumbed its nose at this rule and repeatedly voted down the mandated DR every 18 months to save on money and effort? We can answer that question with another question: “Would you buy into that strata..?” After all, the first question any good realtor or savvy buyer would ask would be, “What are they neglecting … or hiding?”

Major Point: These rule changes, coming into effect March 13 of this year, are something that every strata owner in BC should be aware of.

The above by REAG member J. Neil Hamilton, a Senior Property Advisor with Macdonald Realty Ltd. He can be reached at 604-569-1940 or neilhamilton@macrealty.com.

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Edmonton-based Domenic Mandato president of InvestPlus Properties Canada Ltd. sees Alberta as an investor’s dream market and he told the Land Rush conference why.

• Oil prices are stable and rising. At current prices of around $92 per barrel, Alberta oil patch producers make a profit of up to $30 a barrel.
• Billions of dollars are being invested in the Alberta resource industry, currently $170 billion in new projects are underway or planned.
• Alberta has Canada’s lowest unemployment rate and nearly 100,000 jobs were created in the past year alone. An estimated 13,000 construction jobs are needed this year alone.
• Income taxes are low and there is no provincial sales tax.
• There are no rent controls.
• In-migration and immigration is rising.
• Calgary and Edmonton are seeing falling apartment vacancy rate: down to 1.5% range in downtown Calgary and 3% in Edmonton.

InvestPlus, a limited partnership, buys older apartment buildings in Alberta, fixes them up, raises the rent to market levels and then sells them. He pointed to examples of annual returns of from 24% to 44%.

Even upgraded one-bedroom apartments in Edmonton can generate rents of more than $1,000 a month, he said. InvestPlus is offering the Vantage Fund, which offers 70% of the profits to investors in an RRSP-eligible fund. The minimum investment is $25,000 and the Fund will have from seven to eight rental apartment buildings.

While InvestPlus focuses on major Alberta cities, there are opportunities across the province. An example is Cold Lake, where Imperial Oil has announced it is going ahead with its giant Nabiye oil sands project. Nabiye will access 280 million barrels of reserves, and boost daily production at Imperial’s Cold Lake operation by about 40,000 barrels per day (about 2.5% of the province’s total oil sands output) by the end of 2014.

But Nabiye will be built without the use of on-site accommodation. That means rental accommodation will be more scarce come the fall. “It’s the rental market in Cold Lake that will get really tight,” said Cold Lake Mayor Craig Copeland, noting that tenants also come from the Department of National Defence at CFB Cold Lake, a major military base.

The average Cold Lake detached house price is now $325,000, up from $305,000 a year ago

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The ComFree real estate sales network announced has launched two commission-free brokerages in Ontario and Alberta. They will operate under the name of Commonsense Network Brokerage, part of the ComFree network. The head office for Alberta will be in Edmonton. Customers will be able to list their homes onREALTOR.ca, or a real estate board’s MLS system, in both Ontario and Alberta. Homeowners will be offered a Comfree package ($500 to $1,200) to assist them in selling their property, which would include information on marketing, comparative pricing and open houses.

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The $1.4 billion Evergreen Skytrain extension won’t open for four years, but condominium investors are being recruited to get on board a transit-linked development boom that is reshaping Coquitlam and Port Moody.

There is nothing subtle about the pitch to investors. Every one from the Coquitlam mayor down to the condo sales office is on message with a singular and apparently accurate refrain: invest now in and reap the benefits when the first Evergreen stations begin handling 70,000 passengers a day.

The City of Coquitlam got in front of the transit push earlier. Two years ago, the city increased density zoning to allow three or even four small homes on a typical large lot in areas such as Mallairdville and other established Central Coquitlam neighbourhoods that will be close to the transit line, and then extended it to new developments at Burke Mountain.

Earlier this month, city council approved a rezoning bid by Morningstar Homes for 34 single-family houses on Roxton Avenue, 21 of which will have the detached dwellings. Morningstar will construct the houses on 3.63 acres near Leigh elementary school and Leigh Park, in the Smiling Creek neighbourhood, with rental suites allowed above the garage.

The city also has passed a rule for the Southwest Coquitlam Area Plan that will allow carriage homes and garden cottages as well as triplexes and quadraplexes. The move will increase density in old neighbourhoods such as Austin Heights, Lower Lougheed and Burquitlam.

Carriage homes will only be allowed on properties currently zoned RT-1; owners wanting to build an accessory unit won’t have to go to public hearing – only apply for a development permit (!).

The changes will result in an increase in rentals, but condo developers appear certain the arrival of Evergreen will leave plenty of tenants to go around. Developers are starting to market more than 1,500 residential units along the Evergreen Line route, with many pushing pre-sales and aiming at investors.

An example is the Easton, a 72-unit low-rise that starts pre-sales next Saturday (Feb 11) within 380 metres of the Evergreen Burquitlam station. Condos start at $219,900 for a one bedroom and about 60% of the units, being developed by Allare, are priced under $300,000. Marketing manager Howard Steiss notes that the Easton will appeal to condo investors, since there is no shortage of potential rental tenants. SFU, BCIT and two Douglas Colleges are all within 20 minutes and provide a continuous demand for rentals, he said.

Bosa is bulding 350 condominiiums just north of Burquitlam Plaza, which will be the first Coquitlam stop on the Evergreen line. Bosa is also planning a 400-unit condo project just south of Burquitlam, at Foster Ave. and North Road, with presales launching next summer.

Last October, when Mosaic launched presales on the first of 3 condo buildings on Foster Ave, mostly realtor-investors snapped up 55 units in a few hours, according to TheKey.com president and marketer Cam Good, who is planning pre-sales for the next two Mosaic buildings. Next month, the 200-home Evergreen tower starts presales at Westwood Village near Coquitlam Centre mall near the Douglas College station for Evergreeen.

The other major developer along the line, Polygon Homes, is marketing the 186-unit Caledon building in the 1,400-home Windsor Gate master-planned community near the Coquitlam town centre neighbourhood. Since mid-December, 75 condos have sold. Said Polygon CEO Neil Chrystal: “There are exceptional deals. I think the smart people who are buying in the Coquitlam town centre will be rewarded.”

Magnum Projects is building the upscale 79-unit Bloom townhome project behind Burquitlam Plaza, but presales were capped at 25 homes to satisfy lenders. The rest will be sold when the project completes, likely in mid-2013.

Watch Port Moody: Port Moody is lifting its no-growth restrictions and this spring will start a new official community plan to densify Moody Centre. The city had developed Newport Village and Klahanie (which we recommended investing in), but halted growth after it resulted in gridlocked traffic on St. John’s, Murray and Clarke streets. Inlet view condos could be a prime investment.

THE EVERGREEN STATIONS

Lougheed/Burquitlam: The Evergreen Line will run north from Lougheed Town Centre Station on an elevated guideway along the centre of North Road. Burquitlam Station will be on the east side of Clarke Road near Burquitlam Plaza. Leaving Burquitlam Station, the line will cross to the west side of Clarke Road, before entering a tunnel towards Port Moody.

Port Moody: The Evergreen Line will emerge from the tunnel just east of Barnet Highway. It will travel at ground level along the south side of the Canadian Pacific Rail tracks to Port Moody Station, located at the Port Moody transit exchange site. Continuing east, the line will cross the CPR tracks just before Ioco Station, located north of Barnet Highway.

Coquitlam: The line will continue along the north side of the CPR tracks towards Coquitlam Central Station, located at the Coquitlam transit exchange site. Turning north, the line will run on an elevated guideway along the west side of Pinetree Way, and will cross to the east side near Northern Avenue, before ending at Douglas College Station, north of Guildford Way.

The Evergreen line, expected to be completed by the summer of 2016, will carry passengers from Coquitlam City Centre to downtown Vancouver in 40 minutes, shaving about 45 minutes off highway commute times.

We have recommended the whole area for a number if years. The Westwood Plateau with its 5,000 sq foot homes under 1 million and 2 bedroom condos in Pt. Moody for under $250,000 will work out to be smashing investments.

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Quick note: Very impressive sales activity for March…phenomenal actually-but largely driven by buyers getting pre-approved and purchasing to beat the more restrictive mortgage lending conditions that came into effect on March 18th deadline. Also see attached stats package (at bottom of post) that shows the the Benchmark price for a Westside home (from Main to UBC) is now larger than the West Vancouver Benchmark price-which must be a first. Condo market is reasonable and price gains modest year over year (1-2%). Expect condo market prices to soften a touch (but by not much) over the summer.

VANCOUVER, B.C. – April 4, 2011 – Activity in the Greater Vancouver housing market continued to strengthen in March with both the number of homes sold and added to the region’s Multiple Listing Service® (MLS®) reaching near record levels.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties in Greater Vancouver reached 4,080 in March 2011. This represents a 31.7 per cent increase compared to the 3,097 sales recorded in February 2011, an increase of 30.1 per cent compared to the 3,137 sales in March 2010 and an 80.1 per cent increase from the 2,265 home sales in March 2009. The all-time sales record for March occurred in 2004 when 4,371 transactions were recorded.

“Our market has had a very strong start to the spring season,” Rosario Setticasi, REBGV president said. “With home sales

above 4,000 and nearly 7,000 home listings added to the MLS® in March, it’s clear that home buyers and sellers view this as a good time to be active in their local housing market.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 6,797 in March 2011. This represents a 3 per cent decline compared to March 2010 when 7,004 properties were listed for sale on the MLS®, an all-time record for March. Compared to February 2011, last month’s new listings total registered a 19.4 per cent increase.

At, 13,110, the total number of residential property listings on the MLS® increased 9.9 per cent in March compared to last month and declined 3 per cent from this time last year.

“Conditions favour sellers at the moment, but we’re seeing differences in home-price trends and overall activity depending on the region and property type,” Setticasi said.

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 5.4 per cent to $615,810 in March 2011 from $584,435 in March 2010.

Sales of detached properties on the MLS® in March 2011 reached 1,795, an increase of 34.4 per cent from the 1,336 detached sales recorded in March 2010, and a 100.1 per cent increase from the 897 units sold in March 2009. The benchmark price for detached properties increased 8.3 per cent from March 2010 to $866,806.

Sales of apartment properties reached 1,622 in March 2011, a 29.6 per cent increase compared to the 1,252 sales in March 2010, and an increase of 66.2 per cent compared to the 976 sales in March 2009. The benchmark price of an apartment property increased 2.1 per cent from March 2010 to $403,885.

Attached property sales in March 2011 totalled 663, a 20.8 per cent increase compared to the 549 sales in March 2010, and a 69.1 per cent increase from the 392 attached properties sold in March 2009. The benchmark price of an attached unit increased 3.6 per cent between March 2010 and 2011 to $511,039.

StatsRelease_March2011

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