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Real Estate Talks This is a friendly, interactive exchange of information on all Real Estate related subjects. Follow on Twitter: @RETALKS 2020-08-12T18:16:58-08:00 http://realestatetalks.com/app.php/feed 2020-08-12T18:16:58-08:00 2020-08-12T18:16:58-08:00 http://realestatetalks.com/viewtopic.php?t=129776&p=345463#p345463 <![CDATA[Real Estate Talks • St. Paul’s Hospital site sold to Concord for approximately $1 billion]]>
Jeremy Hainsworth Glacier Media
August 12, 2020

The Burrard Street site of Vancouver’s 124-year-old St. Paul’s Hospital has been sold to development giant Concord Pacific Group for about $1 billion as work continues on a $1.9-billion False Creek Flats replacement facility.

“This is a very important property in Vancouver and we recognize that,” Concord Pacific senior vice president of development Peter Webb said of the land sold by St. Paul’s operator Providence Health Care (PHC).

The development will be mixed-use commercial and residential. What community amenities will be included remains to be seen.

The timing of any development work is contingent on the move to the new site but demolition could begin in several years. Webb said the company recognizes some of the site or facades have heritage values and could be retained.

Webb stressed building and then moving a hospital is a complex undertaking for PHC.

“It really depends on their schedule, not ours,” he said.

It also remains to be seen how high new structures at the site could go due to height restrictions determined by so-called city view cones, vice president David Ju said

There are no plans yet to go through those view cone heights.

How development moves forward will be in conjunction with government, the community and first nations groups, Webb said.

The prime, 6.6-acre site had a 2019 assessment of $702.37 million, down from 2018 $784 million in 2018, according to BC Assessment records. The decrease was due to a decline in the assessed land value. The buildings’ value remained steady at $100,225,000.

Concord Pacific has been involved in acquiring the land since 2019 with approval earlier this year. The deal closed at the end of July.

“We’re extremely pleased with this sale,” PHC president Fiona Dalton said. “It is a unique achievement in Canada that enables us to invest in BC’s health care system while minimizing the cost to taxpayers, and continues to build on our 126-year legacy of compassionate and innovative care, research and teaching.”

Concord Pacific is one the Lower Mainland’s biggest development companies. It redeveloped Vancouver’s old Expo 86 lands, changing the face of False Creek, and more recently Burnaby’s Brentwood Town Centre and Metrotown. Projects are also underway in Richmond and Surrey as well as in Calgary, Toronto and other cities.

The proceeds of the sale are earmarked as part of funding for the new hospital.

The state-of-the-art replacement project for the crumbling hospital, built in 1896, it should be open by 2026, Premier John Horgan said in February 2019.

Webb said if Concord Pacific achieves higher densities than expected for the development, it would increase revenue to PHC for the new hospital under terms of the sale agreement.

https://www.westerninvestor.com/news/br ... 1.24185335

Statistics: Posted by news — Wed Aug 12, 2020 6:16 pm

2020-08-11T16:25:12-08:00 2020-08-11T16:25:12-08:00 http://realestatetalks.com/viewtopic.php?t=129775&p=345462#p345462 <![CDATA[Real Estate Talks • Canadian Immigration Slows Further, As New Permanent Residents Drop Over 44%]]>
One of the driving forces behind Canadian real estate prices is on hold – immigration. Government of Canada (GoC) data shows the number of newly admitted permanent residents to Canada is still making sharp declines in June. The decline was mostly consistent around the country, except in BC and Quebec. The former is seeing a smaller than average decline, and the latter a larger than average.

Permanent Residents To Canada Down Over 44%
The number of new permanent residents arriving in Canada is on the decline. There were just 19,175 people admitted in June, down 44.2% from the same month last year. Year-to-date (YTD), this is now just 103,420 admitted people, down 35.5% from last year. The annual decline is softened by large growth in the first two months of this year. Even with that increase, we’re still seeing a lag in growth.

New Permanent Residents To Ontario Drops Over 41%
Ontario is where almost half of the total permanent residents admitted moved. The province represents 9,145 permanent residents admitted in June, down 41.8% from last year. Year-to-date (YTD) there were 48,455 people admitted, down 35.1% compared to last year. For the province, this would be the lowest rate of admittance in at least half a decade, but likely much longer. A larger monthly decline than YTD implies declines are getting larger.

New Permanent Residents To BC Drops Over 20%
British Columbia (B.C.) is the second largest province for permanent resident arrivals. The province saw 3,990 permanent residents admitted in June, down 20.7% from the same month last year. Year-to-date there were 17,205 people admitted, down 23.64% from the same period last year. B.C. is actually the province seeing the smallest declines of any province in Canada. The smaller monthly decline than YTD implies the declines are improving.

New Permanent Residents To Quebec Drops Over 64%
Quebec has been seeing a steady slide in the number of permanent residents admitted for a few years now. The province only saw 1,365 permanent residents admitted in June, down 64.7% from last year. Year-to-date (YTD) there were 10,950 people, down 39.9% compared to the same period last year. This one isn’t entirely due to the pandemic though, since permanent residents arriving in Quebec peaked in 2017 for the month of June.

The decline in permanent residents is almost entirely due to the pandemic. We’re likely to see these numbers rise as global restrictions ease into next year. In the meantime, hundreds of thousands of people expected to create housing demand aren’t coming, or won’t be coming for a while.

https://betterdwelling.com/canadian-imm ... p-over-44/

Canadian Permanent Resident Change – June
The percent change in permanent residents admitted to Canada for the month of June, compared to last year. Source: Government of Canada, Better Dwelling.
Screen Shot 2020-08-11 at 5.24.57 PM.png

Statistics: Posted by news — Tue Aug 11, 2020 4:25 pm

2020-08-06T16:29:07-08:00 2020-08-06T16:29:07-08:00 http://realestatetalks.com/viewtopic.php?t=129774&p=345461#p345461 <![CDATA[Real Estate Talks • Foreign Buyers are Pumping the Brakes on Home Purchases]]>
Foreign buyers cut back their investment in U.S. residential properties over the 12 months that ended in March. It was the second year-over-year decline.

The National Association of Realtors® (NAR) annual survey among its members about their transactions with international clients found foreign buyers purchased $74 billion in existing U.S. homes from April 2019 through March 2020, a 5 percent decline from the same period a year earlier. The number of properties purchased dropped 16 percent to 154,000.

Foreign buyers who were U.S. residents, either as recent immigrants or holding the appropriate visas, purchased $41 billion in residential real estate, down 8 percent from the prior period. Foreign buyers living abroad spent $33 billion, a 1 percent decrease. Those two types of international buyers were responsible for 4 percent of the nation's total existing home sales of $1.7 trillion during that period.

"Foreign buyers and recent immigrants have become less of a force in the U.S. housing market over the last couple of years," said NAR Chief Economist Lawrence Yun. "A lack of housing inventory - the primary factor hindering domestic buyers - is also holding back some foreign buyers. Additionally, less cross-border travel, falling international trade and fewer foreign students attending American universities are impacting foreign homebuyers."

Persons from China and Canada were the most prolific buyers of U.S. homes, spending $11.5 billion and $9.5 billion, respectively. Those countries have produced the most buyers every year since 2013 although Chinese investment was down more than $2 billion from the previous year. Mexico at $5.8 billion, India at $5.4 billion, and Colombia at $1.3 billion rounded out the top five. Colombia replaced the United Kingdom as the fifth largest country of origin by dollar volume of foreign buyers.

International buyers spent a median of $314,600 on existing homes,15 percent more than the median price of $274,600 for all such U.S. sales. NAR says the difference is due to the location and type of properties purchased. The median purchase by Chinese buyers, $449,500, reflects that more than half the properties were in either California or New York.

"In the upcoming year, better opportunities may become available for foreign buyers in large U.S. cities like New York and San Francisco," said Yun. "New patterns of domestic migration are trending away from expensive cities to more affordable suburbs and small communities because of the pandemic and greater work-from-home possibilities."

Foreign buyers preferred the suburbs to cities; 48 percent purchased in the former location versus 29 percent in an urban area, a trend has persisted for five years. Seven percent bought in a resort area, down from 15 percent in 2009, and reflecting fewer buyers from the United Kingdom and Canada who made many of those purchases.

The Sunbelt remains the preferred destination. Florida led the list for the 12th straight year with 22 percent of international purchases. California ranked second at 15 percent. Texas at 9 percent, New York at 5 percent, and New Jersey at 4 percent completed the top five U.S. destinations.

Thirty-nine percent of purchases were all-cash, with a higher percentage of those transactions, 58 percent, than resident buyers at 27 percent. The highest share of all-cash purchases, 66 percent, were made by Canadian buyers while 40 percent of Chinese buyers also paid cash. Asian Indian buyers were the least likely to pay all-cash at just 8 percent, and the most likely to obtain a mortgage at 87 percent.

Half of foreign buyers purchased the property for primary residence use. Three in four - 74 percent - purchased detached single-family homes and townhouses.

Katie Johnson, NAR's general counsel and chief member experience officer said the association collaborates with local Realtor groups to educate foreign buyers on the opportunities in U.S. real estate and maximize the global business potential in local markets. "NAR and the Realtor brand... has grown to a network of 104 real estate associations across 85 countries, ensuring stable, accessible markets that allow our members to make direct connections with global real estate professionals and sources of foreign investment."

http://www.mortgagenewsdaily.com/080620 ... _sales.asp

Statistics: Posted by news — Thu Aug 06, 2020 4:29 pm

2020-08-05T11:03:16-08:00 2020-08-05T11:03:16-08:00 http://realestatetalks.com/viewtopic.php?t=129773&p=345460#p345460 <![CDATA[Real Estate Talks • Clues To The Post-Pandemic Real Estate Market]]>
Aug 5, 2020

Remember when you made your housing decisions based on proximity to work or a social center? When you wanted to be in an urban environment for the vibrancy of the community and were willing to sacrifice space in order to achieve that? Well, the Covid-19 pandemic has become the great equalizer. With work from home being a more commonplace commerce solution and restaurants closing because of diminished capacity due to social distancing rules, space has become a greater commodity than ever before. As a result, the sphere of where consumers want to live has increased dramatically and offers a glimpse into potential futures for both the commercial and residential real estate markets.

Clues From China

As we start to study clues as to what the housing environment will look like after the coronavirus, I think we need to look back to mainland China — where it all began — because they are about three months further ahead in the cycle. Recently, I chaired an AREAA Global Corporate Advisory Board meeting where one of the board members, Gene Shi, president of Ke.com — one of the largest real estate portals in China, with 200,000 agents and 21,000 brokerages — shared his views and explained that real estate market in China has grown due to pent-up demand.

This is an important indicator of the behavioral buying patterns of the consumer. Shi explained to the meeting attendees that while tier-one cities showed positive recovery in the real estate sector, tier-two and tier-three cities recovered at a slower pace. The momentum of tier-one cities will lead the recovery for the country overall.

While you may not be investing in Chinese real estate, this should be taken as a global leading indicator of how other markets around the globe may fare.

Europe And SARS

As much as Asia gives us great hope, moving west to Europe allows us to see how the pandemic is affecting real estate in those countries. Spain, which suffered a near collapse of its economy in 2008, rebuilt its economy with tax-advantaged and residency programs. The real estate in Spain attracted many other foreign investors, not only from Europe, but from other countries where economic and political challenges became a motivator for relocation. Case in point is the increased immigration to Madrid from Venezuela that began with heavy investment in residential neighborhoods in 2008. The country is now one of the hardest hit with Covid-19 cases during this pandemic. It saw just a 6% increase last quarter of new-build sales according to Reuters.

SARS, the prior coronavirus outbreak, offers many clues as to how the behavioral patterns of consumers will begin to manifest. Many people felt that their living environments were too small when the confines of those four walls had to serve as a home, office and school — there simply wasn't enough space to support all of these uses. As a result, consumers considered and acted on a desire for more space, sometimes leaving the confines of the city. We are seeing this phenomenon take place again, based on a recent New York Times article showing the New York City market down 54% compared to the same period last year, the largest decline in 30 years. According to the same article, there is an uptick in search traffic for apartments that come with outdoor living spaces and home offices. Even those who do opt to stay within the city are looking for more space.

Commercial Real Estate

The interesting dynamic will be how the commercial real estate side of the equation affects residential businesses. The last several months have shown that the majority of employees could indeed work from home. Those who are returning to the office will have social distancing rules to follow, not to mention the psychological dilemma of wanting to return to a location that could possibly be a breeding ground for the virus. Before Covid-19, if you wanted a short commute time to the office, that would weigh heavily on where you would want to live. However, if that major factor were taken away and remote work were more of the norm, your habitation choices would be vaster, and space may take precedence over commute time.

Retail is another component that will ultimately impact the residential real estate world after Covid-19. Those wanting to live near a vibrant metropolis should bear in mind that many retail shops may not recover from the virus. A recent USA Today article stated that Amazon has risen 26% in revenue since the beginning of the pandemic. As a society, we are being conditioned more now than ever to have delivery within a few days, and sometimes hours. Restaurants typically operate on a very small margin, with three to four weeks of cash reserves, and often expect to hit profit when they exceed 80% occupancy; with many social distancing rules recommending 50% occupancy, that math simply does not add up to pre-Covid-19 profitability.

With the more typical reasons for choosing a place to call home challenged, a desire for space may move to the top of the list affecting decision making and potentially showing preference for migration to the suburbs.

Based on the current clues, my prediction is major cities globally will have price adjustments. Savvy investors will see it as an opportunity to purchase and hold properties, much like they did during the financial crisis. There may be a resurgence of the societal need to be in a city once a vaccine is found, but until that time, our new norm is “six feet apart” and “a mask must be worn at all times.” One thing is for sure: The adage of "hindsight is 2020" may have been speaking about the calendar year we are all living.

https://www.forbes.com/sites/forbesreal ... e988e11616

Statistics: Posted by news — Wed Aug 05, 2020 11:03 am

2020-08-01T09:06:01-08:00 2020-08-01T09:06:01-08:00 http://realestatetalks.com/viewtopic.php?t=129772&p=345459#p345459 <![CDATA[Real Estate Talks • Greater Vancouver Condo Pre-Sales Cut In Half, New Inventory Delayed]]>
The pandemic drove Greater Vancouver new home sales off a cliff, but things have improved… a little. MLA Canada, a Vancouver-based real estate firm specializing in condo pre-sales, observed an increase in absorption for June. Despite unusual market conditions and a bump from lows, absorption is the same rate as last year. Although the current rate is likely being managed through inventory, and project delays.

Greater Vancouver Condo Pre-Sales Down 50%, But Off Pandemic Lows
Greater Vancouver condo pre-sales bounced from record lows, but still came short. There were just 36 units sold in June, up 51% from the month before. The number is a massive 50% lower than the same month last year. A bit of a surprise considering last year was one of the slowest Junes on record. This persistent slowdown is turning into a throttle for new project launches.

Over 57% Of Pre-Sale Homes Expected Are Delayed
The extended slowdown in sales is leading to a lot less inventory than expected. Greater Vancouver saw 259 new pre-sales hit the market in June, up 8% from the month before. This works out to a drop of 50%, compared to the same month last year. It’s inline with the decline in sales, but it’s also 57% lower than the anticipated units for the month. That’s about 338 units delayed, that may pop up later, or be cancelled – depending on future absorption.

Units are being absorbed at an incredibly low rate, but similar to last year. The sales to new listings ratio (SNLR) reached 14% in June, the same ratio as last year. Analysts generally believe prices will rise when the SNLR is above 60%, fall below 40%, and are priced correctly between those two.

Greater Vancouver condo pre-sale absorption is unchanged from last year, but with a few caveats. Sales are significantly lower this time around, and so is inventory. Even more inventory has been delayed and throttled to get to this level. The market may actually be softer than absorption implies. Whether that matters depends on if developers can effectively control inventory longer than buyers wait.

https://betterdwelling.com/city/vancouv ... y-delayed/
Screen Shot 2020-08-01 at 10.06.51 AM.png

Screen Shot 2020-08-01 at 10.05.51 AM.png

Statistics: Posted by news — Sat Aug 01, 2020 9:06 am

2020-07-31T11:52:20-08:00 2020-07-31T11:52:20-08:00 http://realestatetalks.com/viewtopic.php?t=129771&p=345458#p345458 <![CDATA[Real Estate Talks • Pandemic? What pandemic? Seattle-area home prices keep rising fast]]>
By Katherine Khashimova Long
Seattle Times business reporter

Deep into the pandemic, prices for Seattle-area homes were still rising faster than any major city in the country, save Phoenix. There’s one sign, though, that the growth may be slowing.

Homes in the King, Pierce and Snohomish tri-county area saw average year-over-year price increases of 6.8% in May, according to the new release of the S&P CoreLogic Case-Shiller Home Price Index — the sixth consecutive month Seattle-area price growth has topped national averages. Phoenix saw 9% year-over-year price growth in May.

The index, which lags by two months, reports a three-month rolling average of home prices — meaning the numbers for May actually represent average home price gains since the onset of lockdown measures to control the pandemic in March.

Nationally, home prices rose an average of 4.5% compared to last year, growth S&P managing director Crag Lazzara called “stable.”

The trend of rising prices, though, may be slowing, he said.

“Although prices increased in May … they did so at a decelerating rate,” Lazzara said. At the city level, he said, there was a similar development: Prices increased in all 19 cities reporting data to Case-Shiller, but accelerated in only three. Compare that to last month, in which 12 cities saw accelerating month-over-month price growth, and 18 the month before that.

The Seattle area was one of the metros where growth decelerated; in April, prices rose 7.3%.

“More data will obviously be required in order to know whether May’s report represents a reversal of the previous path of accelerating prices or merely a slight deviation from an otherwise intact trend,” Lazzara said.

In the Seattle area, prices for the most affordable homes are still increasing the most rapidly. Prices for homes under $446,909 rose just under 10%, year-over-year, while prices for the most expensive homes — those over $667,808 — rose by close to 5% compared to last year. Prices for homes between those two points rose by roughly 7%.

Some industry watchers pointed to clouds on the horizon. Zillow economist Matthew Speakman, in a statement, expressed a measure of skepticism that the housing market could continue its upward climb amid “substantial risks” from the pandemic.

So far, an inventory crunch and historically low mortgage rates have kept home prices high. But “a resurgence in coronavirus case counts, and the broader economic uncertainty that accompanies it, poses new risks to the outlook for home prices, and seasonal factors should start to erode buyer demand,” Speakman said. “It’s likely that the housing market will feel the effects of this downturn at some point.”

https://www.seattletimes.com/business/r ... sing-fast/
Screen Shot 2020-07-31 at 12.52.04 PM.png

Statistics: Posted by news — Fri Jul 31, 2020 11:52 am

2020-07-30T08:45:47-08:00 2020-07-30T08:45:47-08:00 http://realestatetalks.com/viewtopic.php?t=129770&p=345457#p345457 <![CDATA[Real Estate Talks • US Federal Reserve: Canadian Real Estate Buyers Returned To Exuberance Before Pandemic]]> Canadian real estate buyers were excitedly disregarding risk before the pandemic hit. The US Federal Reserve Bank of Dallas (Dallas Reserve) exuberance index shows expectations surged in Q1 2020. The index is designed to capture explosive price growth, detached from fundamentals. A single quarter isn’t enough to say the market is bound for further detachment, but it does show buyers enthusiastically ignored fundamentals before the pandemic.

The US Federal Reserve’s Exuberance Index
The exuberance indicator is the US Federal Reserve’s “smoking gun” indicator for bubbles. The index responds to explosive dynamics in real estate price movements. Sudden increases indicate buyers are becoming more emotional about their purchase. More emotion involved in prices, means fewer fundamentals are being considered.

Emotional premiums tend to be vulnerable to, well, changes in emotion. A sudden spike in unemployment, a recession, or a new policy can quickly derail opinion. When emotions are quickly removed, you’re left with the potential for prices to deflate, or even the c-word – cr*sh.

So how do you read this magic emotion meter? Efthymios Pavlidis and the Dallas Fed did all of the heavy lifting and calculations already. They publish two sets of numbers – an exuberance indicator, and a threshold value. When exuberance is greater than the threshold value, the buyers are demonstrating exuberance. If the value stays above for more than five quarters, the market has become exuberant. When the market has become exuberant, the odds of a correction jump.

Canadian Real Estate Buyers Jump Back Into Exuberance

Canadian real estate buyers were heading all-in before the pandemic struck. The index read 1.51 in Q1 2020, up 25% from a quarter before. Exuberance cleared the critical threshold for the first time since Q3 2018. The indicator was also at the highest level since Q2 2018. Buyers were definitely under the impression they were in the clear.

Despite the jump in the territory, the market has only seen a small burst of exuberance. It would need another 4 quarters for the market to officially be in this territory. With just a spike for a single quarter, the downtrend is still intact for now. Generally emotions don’t just drop down in a straight line.

Canadian real estate markets saw elevated activity in the first quarter, pre-pandemic. This doesn’t mean it will persist into the second quarter, but it doesn’t mean it will totally stop either. Most markets have been completely frozen, with prices moving fairly laterally, as the buyers left disregard any long-term impact. While they’re disregarding long-term market consequences though, risk firms are warning to expect a dramatic shift in the second half.

https://betterdwelling.com/us-federal-r ... -pandemic/

Canadian Real Estate Buyer Exuberance
An index of exuberance Canadian real estate buyers are demonstrating, in relation to pricing fundamentals.
Screen Shot 2020-07-30 at 9.45.26 AM.png

Statistics: Posted by news — Thu Jul 30, 2020 8:45 am

2020-07-29T12:17:29-08:00 2020-07-29T12:17:29-08:00 http://realestatetalks.com/viewtopic.php?t=129769&p=345456#p345456 <![CDATA[Real Estate Talks • No "doom and gloom" in store for Canadian real estate – Royal LePage’s Soper]]>
29 Jul 2020

Sustained market strength, subject to supply constraints, will be the predominant dynamic in the Canadian housing sector for the rest of the year, according to Royal LePage CEO Phil Soper and Sotheby’s Canada CEO Don Kottick.

In a joint interview with The Financial Post, the two executives highlighted the major role that housing inventory will play in the period immediately after the COVID-19 pandemic eases.

Soper said that home prices largely rely on the balance between supply and buyer activity.

“There are a lot of people who are looking to put roofs over their heads,” Soper said. “We just don’t see the number of homes for sale, the supply side of this, climbing to the point where home prices will collapse.”

Royal LePage’s latest predictions have placed annual growth by year-end at 2.5%.

“It’s about half the long-term rate of home price appreciation we’ve seen in Canada, so we’re not talking about a great year – but it’s far, far from the doom and gloom that some of those who are not as close to the market [as us] have prophesized,” Soper said.

Kottick said that the Bank of Canada’s current record-low key interest rate will also feed into this trend, thus keeping the market afloat.

“The Bank of Canada mentioned that it is highly unlikely to touch interest rates until 2023, so the money is going to be a lot more affordable for the foreseeable future,” Kottick said. “And that was always a concern: ‘When we come out of this, is the government going to increase interest rates?’ Which will have an adverse effect. So that’s one dynamic that has been kind of answered until 2023. I think that will add a lot of confidence to the market.”

The question of supply should be in policymakers’ minds even long after the outbreak has passed, Kottick said.

“We have never addressed the supply issue in Canada, and I think we’re seeing the impact of [the fact] that supply has never been increased,” Kottick said. “When you look at the global environment, I think this [crisis] has put the spotlight on Canada as being a global destination. We’ve been getting calls from our affiliates all over the world – India, the Asia-Pacific region, the Middle East – and they all want to expose their markets to us. I think there might be a drop in immigration, but I think the government understands the need for immigration so it is going to be ramped up. I think we’re going to see a surge of people who want to come to Canada.”

Soper echoed these sentiments, saying that as a premier destination, Canada will likely see intensified demand from inbound populations.

“The solution is the supply side, and it’s not going to get addressed in a piecemeal fashion,” Soper said. “When we come out of this, the new normal is going to have to focus on health, education, and housing as major national priorities that align federal, provincial, and municipal governments to providing enough for our growing population.”

https://www.canadianrealestatemagazine. ... 31927.aspx

Statistics: Posted by news — Wed Jul 29, 2020 12:17 pm

2020-07-28T11:38:56-08:00 2020-07-28T11:38:56-08:00 http://realestatetalks.com/viewtopic.php?t=129768&p=345455#p345455 <![CDATA[Real Estate Talks • Greater Vancouver Sees Biggest Single-Month Surge Of Inventory In Half A Decade]]> A lot of Greater Vancouver condo owners all had the same idea – last month was the perfect month to sell. Real Estate Board of Greater Vancouver (REBGV) data shows June saw the largest single-month surge of new condo apartment listings in at least half a decade. While sales did also rise from last year’s lows, the number of new listings were enough to push prices lower from peak.

Greater Vancouver Condo Prices Fall Further From Peak
Greater Vancouver condo apartment prices have been slipping for several months, but are still higher than last year. Across REBGV the typical condo apartment cost $680,800 in June, up 3.6% from a year before. In the City, Vancouver East condos had a benchmark of $588,400, up 3.1% from a year before. In Vancouver West, the condo benchmark reached $789,300, up 6.0% from a year before. While all of these numbers are higher than last year, all of these benchmarks are dropping further from the peak.

All three benchmarks are seeing the rate of growth rise, but prices falling further from the peak. The 3.6% 12-month increase for June is higher than the month before. However, June was also the third consecutive month of price declines. Greater Vancouver condo prices are now down 5.6% from the peak in June 2018. Just a month before, they were only down 4.8% from the peak. Prices are higher than a year before due to the delayed seasonal curve, but are still falling from the peak.

Greater Vancouver Condo Sales Are Higher Than Last Year
Greater Vancouver condo sales are moving higher than last year. REBGV saw 1,105 sales in June, up 69.2% from a month before. This represents an increase of 17.4%, when compared to the same month last year. Last year was a multi-decade low, at nearly half of June 2016’s volume. Easy beat, but a beat during a pandemic nonetheless.

New Listings For Vancouver Condos See Highest Level In Half A Decade
Greater Vancouver hasn’t seen this many new listings for condos in a single month for a very long time. REBGV saw 2,818 new condo listings in June, up 55.8% from a month before. This represents an increase of 34.1% compared to the same month last year. No single month has seen this many new listings in at least half a year.

Greater Vancouver Condo Sales Vs. New Listings
The number of condo apartments sold vs new inventory in Greater Vancouver.

The big surge of new condo listings helped to push inventory higher than the month before, but it’s still lower than last year. REBGV reported 5,192 active listings in June, up 17.94% from a month before. Despite this big increase, inventory is still 13.2% lower than the same month last year. Other than last year, Vancouver hasn’t seen this kind of condo apartment inventory since June 2015.

Greater Vancouver condo prices haven’t seen a return to their 2018 peak, and are falling from the annual high. Prices have consistently slipped since the onset of the pandemic, despite a bump in sales. Even though total inventory is lower, new listings are hitting the market at such a rapid pace, it’s killing price gains.

https://betterdwelling.com/city/vancouv ... -a-decade/

Statistics: Posted by news — Tue Jul 28, 2020 11:38 am

2020-07-28T11:33:54-08:00 2020-07-28T11:33:54-08:00 http://realestatetalks.com/viewtopic.php?t=129767&p=345454#p345454 <![CDATA[Real Estate Talks • Bank Of Canada Pumping Billions Into Mortgage Liquidity To Prop Up Real Estate]]> Canada’s central bank is desperately trying to prop up real estate markets with liquidity. Bank of Canada (BoC) has been injecting billions into Canada Mortgage Bonds (CMBs). The central bank began purchasing a few million worth of bonds during last year’s real estate slow down. As the pandemic hit, the BoC began buying hundreds of millions worth of CMBs per week. The flood of liquidity has a limited impact on preserving prices, but creates a massive withdrawal risk.

Canada Mortgage Bonds (CMBs)
Canada mortgage bonds (CMBs) are debt securities guaranteed by the Government of Canada. Basically, lenders originate mortgages, and then group them into a pool. The pool is then sold to the government as a mortgage backed security (MBS). In order to buy MBSs, the government sells CMBs to investors to generate the funds. The cash flow from the MBS is then used to make payments to investors holding CMBs. Long story short, the CMBs are a state secured vehicle for mortgage financing.

Since the government of Canada guarantees all CMBs, they pay very little interest. In a normal market, when demand rises for CMBs, interest paid falls even further. When demand drops, interest rates typically rise to attract more investment. Simple supply and demand, right? Not in a country that’s gone all-in on its housing bubble.

When real estate markets began looking a little tired last year, the BoC stepped in. They started buying CMBs to “improve liquidity,” which is bankster for suppressing rates. At first, they said it was going to be on a non-competitive basis – meaning they would support market rates and prevent increases. Starting on March 20 of this year though, they announced they would start buying on a competitive basis. They now actively play a role in driving mortgage rates down. This drives investors even further away from the asset class, meaning they have to buy even more. In other words, money printer goes brrr.

The BoC Is Injecting Hundreds Of Millions Per Week
The BoC has purchased billions in CMBs since the beginning of the year. As of July 22, the BoC held $7.95 billion in CMBs, up $234 million from a week before. That works out to a balance increase of 1,450% from the same week last year. What started as just a few million worth of bonds, has turned into a few million per week.

Mortgage-based stimulus creates two key vulnerabilities – demand is pull forward, and taper tantrum. By lowering rates, the market doesn’t receive new demand. It borrows demand from the future. Only so many people are stimulated into buying with lower rates, and it largely just results in higher spending. After the market burns through people incentivized by lower rates, it creates another gap later on. This becomes a whole other problem when that cohort of buyers is smaller due to borrowed demand.

A taper tantrum is how the market reacts to the withdrawal of this stimulus. After all, if the market buys on stimulus, it holds back when it disappears. The return to normalized rates is so difficult for the market to accept, it rarely happens. And when it does, it causes another pressure against buyers, and lasts just a few months. For example, when interest rates briefly increased in 2018, and sales dropped to lows.

The BoC is pumping billions into the market to flood it with cheap money, and keep it floating. Despite stimulus, prices are starting to slip in cities like Toronto and Vancouver. Even worse, this stimulus is so large, it creates an overhang the government will have to deal with later. Combine this with the payment deferral cliff, and the market is increasingly lining up issues that will require even bigger stimulus to prevent a disaster.

https://betterdwelling.com/bank-of-cana ... al-estate/

Canada Mortgage Bonds (CMBs) Held By The BoC
The dollar value of Canada Mortgage Bonds held as assets by the Bank of Canada, in millions of dollars.
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Statistics: Posted by news — Tue Jul 28, 2020 11:33 am