Vancouver real estate at risk if Canadian lending not constrained

Vancouver real estate at risk if Canadian lending not constrained: TD
Canada housing 10-15 pct over-valued

OTTAWA - Canadian housing is 10 to 15 percent over-valued, Canada’s second largest bank warned, as it called for more action to constrain lending growth.

Toronto-Dominion Bank chief economist Craig Alexander said last week in an analysis that if the overvaluation were unwound rapidly, the market correction would be three times the magnitude of the housing market correction of the early 1990s.

Alexander said it is more likely that there will be a gradual decline in sales and prices over the next several years unless there is a sharp rise in joblessness or interest rates. He warned against complacency, however.

“We need to acknowledge that a significant imbalance has developed and it poses a clear and present danger to Canada’s medium-term economic outlook,” he wrote. “It also suggests that further actions to constrain lending growth may be prudent.”

At greatest risk is Vancouver, a magnet for foreign buyers, along with the Toronto condo market, and the broad housing markets in Quebec City and Montreal, he said.

“Nevertheless, beyond selected cities, it is natural to assume that it will be a shock to all real estate markets when interest rates eventually rise from their prevailing exceedingly low levels,” he said.

Parallel with the real estate valuations is elevated household indebtedness. The ratio of debt to personal disposable income declined in the fourth quarter of 2011 to 150.6 percent from 151.9 percent in the third, but Alexander said this was due to a spike in unincorporated business and farm income that will probably prove to be temporary.

In fact, he forecast that by late 2013 the ratio will reach the 160 percent peak seen in the United States and Britain before their real estate corrections.

Alexander said the Bank of Canada, which has repeatedly voiced concern over housing prices and household debt, is in a bind because if it raises rates while the U.S. Federal Reserve holds rates steady, that would boost the Canadian dollar further and slow growth.

A majority of forecasters polled by Reuters last month predicted that the federal government would tighten mortgage rules this year.

 

Technorati Tags: Real Estate Canada Housing Vancouver

Cat: Canada Real Estate 

BC Government announces HST Rebate increase

Threshold being raised to $850,000 effective April 1, 2012

The Honourable Kevin Falcon, Minister of Finance held a press conference today in Victoria to announce transition rules for the harmonized sales tax and the affect it will have on the home building industry. Effective April 1, 2012 the threshold for new housing rebates will be increased from $525,000 to $850,000, including secondary homes.  

"We are elated the Provincial Ministry of Finance and the Federal Finance Department asked for our input and that our provincial government listened to the lobbying efforts of CHBA BC," said CEO, M.J. Whitemarsh. "We had the confidence the Government would take our concerns to heart and implement the best solution for our industry, the news today was worth the wait and is even better than we could have anticipated."  

Since the referendum results to rescind the tax, the Canadian Home Builders' Association of BC (CHBA BC) has worked diligently providing information from members to the government requesting the implementation of the transition rules be done as simply and quickly as possible to prevent any further stalling of the residential housing industry.    

"The out-of-box forward thinking from the Government has created a stable situation for all CHBA BC members who build secondary homes," Whitemarsh said. "Houses purchased as of April 1st will ultimately be receiving a $42,500 discount, now that the threshold has been raised."

Releasing the transition rules on housing early was a wise and bold move on government's part, one that is mutually beneficial. CHBA BC lobbied for a tax rebate to be created for consumers on new home purchases and renovations, so the industry could move forward and gain momentum once again.

"Raising the threshold is a brilliant decision that is fair and equitable, a huge benefit to all consumers that will spur the market," said Doug Wittal, President of CHBA BC. "Including the second home market outside the GVRD and CRD will create a huge boom, creating jobs and pushing the industry forward in very innovative ways."  

 

 

 

 

Cat: BC Real Estate

Greater Vancouver housing market trends near long-term averages as spring market approaches

Greater Vancouver housing market trends near long-term averages as spring market approaches

 

Closer alignment between home buyer and seller activity helped bring greater balance to the Greater Vancouver housing market in February.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,545 on the MLS® system in February 2012. This represents a 61.4 per cent increase compared to the 1,577 sales recorded in January 2012, a decline of 17.8 per cent compared to the 3,097 sales in February 2011 and a 2.9 per cent increase from the 2,473 home sales in February 2010.

February sales in Greater Vancouver were the third lowest February total in the region since 2002, though only 151 sales below the 10-year average.
“With a sales-to-active-listings ratio of over 18 per cent, we see fairly balanced conditions in our marketplace as we move into the traditionally busier spring season,” Rosario Setticasi, REBGV president said. 

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,552 in February 2012. This represents a 2.5 per cent decline compared to February 2011 when 5,693 properties were listed, and a 3.5 per cent decline compared to January 2012 when 5,756 homes were added to the MLS® in Greater Vancouver.
Last month’s new listing count was the second highest February total in Greater Vancouver since 1996.

At 14,055, the total number of residential property listings on the MLS® increased 12 per cent in February compared to last month and increased 17.9 per cent from this time last year.
“Region-wide we’ve seen relative stability in home prices over the last six months, but it’s important to do your homework and consult your REALTOR® because pricing can vary considerably depending on the neighbourhood and property type,” Setticasi said.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $670,900, up 6 per cent compared to February 2011 and an increase of 0.9 per cent compared to January 2012. The benchmark price for all residential properties in the Lower Mainland is $601,300, an increase of 5.5 per cent compared to February 2011.

Sales of detached properties on the MLS® in February 2012 reached 1,101, a decline of 21.5 per cent from the 1,402 detached sales recorded in February 2011, and a 12 per cent increase from the 983 units sold in February 2010. The benchmark price for detached properties increased 10.5 per cent from February 2011 to $1,042,900.

Sales of apartment properties reached 1,020 in February 2012, a decline of 15.4 per cent compared to the 1,206 sales in February 2011, and a decrease of 5 per cent compared to the 1,074 sales in February 2010. The benchmark price of an apartment property increased 2.8 per cent from February 2011 to $373,300.

Townhome property sales in February 2012 totalled 424, a decline of 13.3 per cent compared to the 489 sales in February 2011, and a 1.9 per cent increase from the 416 townhome properties sold in February 2010. The benchmark price of a townhome unit increased 0.7 per cent between February 2011 and 2012 to $472,800.

 

Cat: Vancouver Real Estate

Technorati Tags: Vancouver Real Estate Housing Condo REBGV Greater Vancouver

By the Granville Bridge, a tower with a difference

 

Proposed tower twists from triangle to rectangle
Plan includes 49 storeys at north end of Granville Street Bridge

The collection of glass towers that make up Vancouver's skyline may be given a dramatic facelift with the proposal of a unique 49-storey tower at the north end of the Granville Street Bridge.

The tower, which would lie at the corner of Howe Street and Beach avenue, starts as a triangle at the base but twists into a rectangle higher up above the bridge.

The developer group Westbank Projects Corp., who built Vancouver's tallest building the Shangri-La, has brought in Danish architect Bjarke Ingels to add flare to the city's skyline that has sometimes been labelled as monotonous.

"Vancouver has been criticized as having a beautiful city but the architecture is rather bland-the buildings all look the same," said Vancouver architect James Cheng. "I think we have the nickname 'the see-through city' because so much glass is being used."

In addition to condos, the project would offer rental space and feature commercial space that would provide amenities such as an under-bridge gathering centre, a childcare facility, beer gardens and shops-a space described as "Granville Island north." The total site of the area would take up nearly 137,000 square feet.

Cheng, who wrote a letter to support the rezoning application to the city, said what excites him about the project is the chance to overhaul the mostly deserted space below the Granville Bridge into an area that offers locals places to gather and shop.

"One of the most important parts of this development is to provide an existing link between [the surrounding] neighbourhoods and provide all those services and amenities," he said. "It would turn one of the most wasted landscapes under the Granville Bridge into a vibrant hub for the community."

With the unique shape and design of the tower, Cheng said it would be the most structurally challenging project to date for Ingels, who has made his name through distinctive designs. "To put the heavier part of the building at the top it literally turns things upside down, which challenges the engineers to make it work in an earthquake zone," Cheng said.

But Cheng said he has full confidence Ingels can pull it off.
"What I admire about Mr. Ingels is he really is probably the most creative architect I've met, anywhere. He can really think outside of the box."

The $200-million project is in the pre-approval stage with the city and residents will have their say about the new proposed development at a community open house scheduled for early April. "I think the project has a very good chance because the developer has a very good track record," Cheng said of Westbank, which developed Shaw Towers.

Vision Vancouver Coun. Geoff Meggs said it might take some time for the proposal to reach city council, but he's looking forward to the reactions from city staff and the public. "I think people have been saying that it's time for a change of pace in terms of the appearance for some of the towers that are downtown," Meggs said.

The design will also have to get the approval from a special panel of experts, which includes two international architects. The panel will evaluate the project April 11 to determine whether it meets architectural and sustainability standards. City council will use the panel's advice when deciding whether to approve the project. Representatives for Westbank were not available for comment before press time.

Cat: Vancouver Real Estate

Vancouver Is Now The Most Expensive Housing Market In North America

 

Cat: Vancouver Real Estate