Market Update

False Creek condo developments
pitched to fund renovations to
BC Place.

Staff Reporter
The Province
Friday, January 25, 2008

Will BC Place live to see more Grey Cups like this one in 2005? Its prospects looked grim after a roof collapse a year ago, but a new development proposal could keep it going well into the future.

VANCOUVER - The Crown corporation that operates BC Place is hoping the city will let it build condo and commercial towers on vacant lands surrounding the deteriorating facility so it can keep it going for "25 to 30 years." David Podmore, who chairs the BC Pavilion Corporation, has asked the City of Vancouver to consider a proposal for major developments with proceeds going to fix up BC Place.

He said in a phone interview Friday that he foresees getting another 25 to 30 years of use out of the facility if it gets the refurbishing it needs. "We want to make improvements to BC Place, including replacing the roof, and we want to pay for that work by allowing development on our land," said Podmore in a release.

"BC Place is a major community asset that generates $58 million in annual economic impact. But, after 25 years and more than 24 million visitors, it certainly needs refurbishing." He noted Friday that the projected lifespan of the roof when BC Place was built in 1983 was about 20 to 25 years, so he says it's actually given "good value."

Podmore said it was too early to speculate on the scale of the project or how many towers it would include.The developments on about 6.5 hectares of vacant land around the big dome would require an amendment to the official development plan for False Creek North. He said the Crown corporation realizes the city can't make a long-term decision on the idea until after that amendment has been approved or rejected through a public process. But he's hoping to get direction on whether it is worthwhile to get some upgrading done on the stadium prior to 2010.

The roof of BC Place collapsed a year ago under the weight of a heavy snowfall, and the building requires other significant renovations if it is to continue operating in the long term. Podmore said aside from a new roof using more modern technology, a renovation would include upgrades to washrooms, common areas and concessions. He'd also like to see the plaza areas around the building changed "to make them more interesting and inviting."

Podmore took over the corporation last April. It also oversees the operation and expansion of the Vancouver Convention and Exhibition Centre.

2008 Market Forecast

Slow and steady growth forecast for residential real estate in
major Canadian markets in 2008, says RE/MAX.

Canadian home sales to top 500,000 in 2007.

After posting extraordinary gains in 2007, housing market performance will moderate in most major Canadian centres in 2008, according to a report released by RE/MAX.

The RE/MAX Housing Market Outlook 2008 examined residential real estate trends in 18 markets across the country. The report found that while economic prospects will continue to improve next year, few major markets are expected to exceed record sales levels set in 2007. Winnipeg, Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Ottawa, Sudbury, Saint John, Halifax-Dartmouth, and St. John’s are all predicted to buck the trend in 2008, with appreciation ranging from one to seven per cent. Average price is forecast to increase in 78 per cent of markets surveyed next year, with the lowest price increase expected in Edmonton and the highest in St. John’s.

Nationally, the number of homes sold is expected to break through the half-million threshold in 2007, climbing 13 per cent to an estimated 545,400 units, up from 483,770 units one year ago. Average price is projected to appreciate nine per cent to $303,000, up about $25,000 over 2006 levels. In 2008, home sales are expected to retreat to 500,000 units while Canadian housing values are forecast to continue their ascent, rising six per cent to $321,000.

“Clearly, economic prosperity has translated into increased housing sales and upward pressure on prices across the board,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “The country’s economic engine fired on all cylinders throughout the year, despite dire conditions south of the border. As in 2007, inventory will be the major wildcard next year—the ultimate variable most expected to influence housing market conditions and performance. A return to tight market conditions could mean all bets are off as buyers are forced to compete, creating increased market pressure.”

Major market frontrunners for price appreciation in 2008 include St. John’s (12 per cent), Regina and Kelowna – Central Okanagan (nine per cent), Hamilton-Burlington and Saint John (eight per cent) and Greater Vancouver (seven per cent). Leading the country in sales growth next year will be Kitchener-Waterloo (seven per cent), followed by Hamilton-Burlington, London-St. Thomas, Sudbury and Halifax-Dartmouth, each forecasting a five per cent gain. Higher mortgage rates and increased inventory levels failed to materialize in most major centres, making 2007 a record year for real estate activity in Canada. By year-end, housing values across the country are expected to shatter existing records. Serious double-digit increases in average price are forecasted for Saskatoon (49), Edmonton (31.5), Regina (21), Calgary (20), Sudbury (20), Kelowna (19.5) Saint John (17), St. John’s (12), and Greater Vancouver (10). Saskatchewan dominated real estate news in 2007, reporting some of the highest percentage increases in unit sales. The number of homes sold in Regina by year-end is expected to top 35 per cent, bringing sales to an estimated 4,000 units. Neighbouring Saskatoon is forecast to climb 28 per cent to 4,400 units in 2007.

Other centres expected to post double-digit gains in activity include Saint John (19 per cent) Kitchener-Waterloo (13 per cent), Halifax-Dartmouth (12 per cent), St. John’s (11 per cent), and Toronto (10 per cent). “Western markets were first out of the gate in 2007, but those in the East followed suit,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “By yearend, some of the most impressive gains in home sales will be realized in Ontario and Atlantic Canada. Solid economic fundamentals, including billions of dollars in capital projects, a positive unemployment outlook, and solid consumer confidence levels will propel markets forward. A slow and steady growth trajectory, minus the peaks and valleys experienced in 2007, is forecast for next year.”

Greater Vancouver Area
Strong economic fundamentals have once again served to bolster residential real estate activity in the Greater Vancouver Area. By year-end, home sales are expected to rise three percent to an estimated 37,680 units, up from 36,479 one year ago. Average price, already the highest in the country, is forecast to appreciate 10 per cent to $560,000, up approximately $50,000 over 2006 levels. Solid consumer confidence and unemployment levels under four per cent prompted many first-time and move-up buyers to enter the housing market this year.

Low interest rates and new mortgage products, offering longer amortization periods, made it possible for many to realize homeownership. Affordability continues to be an issue in Vancouver, especially for inexperienced buyers who have to compete with builders and investors for choice product in older, established neighbourhoods. Single-detached homes now start at $700,000 in Vancouver East. Resale condominiums remain most affordable, with entry-level prices starting from $200,000 to $300,000. Increased inventory levels in the downtown core should keep condominium prices in check for the remainder of the year.

At the other end of the spectrum, luxury home sales, starting at $2 million, have been incredibly robust. Although overall inventory levels have improved, premium properties are still hard to come by in coveted areas such as West Vancouver, Vancouver Westside, and Vancouver East. As such, purchasers are more than willing to ante-up, as illustrated by a recent sale of a $2.32 million property originally listed at $1.698 million and bid up by 17 offers.

Local buyers are leading the charge for real estate in Vancouver, followed by purchasers from Mainland China and other countries, as well as Alberta. The strength of the Canadian dollar has deterred American buyers traditionally active in area. New home construction has also had its challenges over the past year, as a civic strike has held up building permits. Rising costs due to labour and land shortages have also contributed to the decline in building activity.

Housing Market Outlook 2008
In an effort to recoup costs, the False Creek South condominium development is selling units at future prices - a move that will protect them from any increases in the future. The Greater Vancouver Area’s diverse economic make-up has contributed to solid GDP growth in 2007. The city has strong biotechnology, environmental, film/TV, new media, telecom, and wireless sectors. A solid employment outlook, increased disposable income, and greater retail spending is expected to take real GDP growth to 3.4 per cent in 2008 and beyond.

Concerns over the housing meltdown in the U.S. may have some impact on residential housing in the Greater Vancouver Area in 2008. Sales activity is expected to moderate somewhat, with unit sales matching 2007 levels. Average price will continue to climb, breaking through the $600,000 price point by year-end 2008.

The complete RE/MAX market forecast for 2008 can be viewed at:

http://www.remax-western.ca/resources/housing08.pdf

Market Review

BC Home Sales Smash
Record Book
Vancouver, BC – January 11, 2008.

British Columbia Real Estate Association (BCREA) reports residential sales volume on the Multiple Listing Service® (MLS®) in BC climbed 19.5 per cent to $45.1 billion in 2007, the highest level ever recorded.

Residential unit sales increased 6.4 per cent to 102,811 units in 2007, only the second time BC home sales have exceeded the 100,000 unit mark (a total of 106,310 homes traded hands in 2005). The average MLS® residential price in the province reached a record $439,121 in 2007, up 12.3 per cent from 2006.

“Strong consumer demand buoyed by employment growth, rising wages and migration was a significant factor in BC’s housing markets last year,” said Cameron Muir, BCREA Chief Economist. “In the province’s major urban centres, sales activity reflected increasing demand for condominium apartments and townhouses. The largest gains in home prices occurred in the Kamloops, Okanagan and Kootenay markets where a legion of recreation, retiree and investment buyers put pressure on existing home inventories.”

“BC housing markets will experience less frenetic activity in 2008,” noted Muir. “Eroding affordability, rising new home completions adding to inventories and weaker economic growth are expected to provide a moderating influence this year.”

MLS® residential sales volume in December increased 24.2 per cent to $2.19 billion compared to the same period last year. Residential unit sales climbed 8.8 per cent to 4,791 units over the same period. The average residential sales price rose 14.2 per cent to $457,825 in December compared to December 2006.

Market Review

Condos lead housing starts. About 80 per cent of new construction is multifamily, says CMHC.

Paul Luke
The Province
Thursday, January 10, 2008

The Vancouver area finished 2007 with the third-highest number of housing starts in a half-century and the pace of home building is expected to remain brisk this year.

Fuelled by a strong condo market, the overall number of housing starts hit 20,736 in 2007, up 11 per cent from 2006, Canada Mortgage and Housing Corp. said yesterday. Multifamily homes comprised about 80 per cent of housing starts in the Vancouver area last year, according to CMHC's preliminary figures for the year.

Single-detached housing starts fell by one-quarter from 2006, CMHC market analyst Richard Sam said. "With the overall average MLS price of a single-detached house over $800,000 in Greater Vancouver, buyers have shifted their expectations toward more affordable, higher-density-style housing," Sam said. "Developers have honed in on this demand and increased the number of new multiple-family projects being built." Last year brought mixed results to areas in the eastern part of the Lower Mainland.

Overall starts in the Abbotsford area fell 10 per cent in 2007 despite a 23-per-cent rise in single-detached starts. In the Chilliwack area, a 50-per-cent surge in multifamily starts drove an 11-per-cent increase in overall starts.

Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said residential construction should remain strong in 2008, thanks to the healthy regional economy and robust job market.

The region will likely notch about 19,000 starts this year - little changed from the average for the past four years, he said. "We're optimistic," Simpson said. "We're seeing a lot of confidence in the industry that the market will still be there." Rising land and labour costs, as well as growing municipal development charges, may yield a six-to-eight-per-cent price increase this year, he said. The region's land constraints mean multifamily projects will continue to dominate in 2008.

"Among this generation of first-time homebuyers, there will be those who live their entire lives in some form of multiple-family housing, whether it's townhouses or apartment condominiums," Simpson said. "Initially, the reason is affordability but over time they may find that condominiums more appropriately match their lifestyle and they don't want to do anything else."

Across B.C., overall housing starts in urban areas rose by 5.5 per cent last year, CMHC said.

Urban multifamily starts rose to a 14-year high in 2007, accounting for more than two-thirds of B.C. housing starts, CMHC said. Nationally, housing starts rose one per cent last year to 229,600, the second-highest level in almost two decades.

CREDIT: Source: CMHC. Graphic, The Province
Change in Lower Mainland housing starts, 2006-07

Market Update

2007 Residential housing sales rank second all-time.

VANCOUVER, B.C. - January 3, 2008

Residential housing sales for 2007 are the second highest ever recorded by the Real Estate Board of Greater Vancouver (REBGV). The REBGV reports that residential attached, detached and apartment property sales totalled 38,050 between January 1 and December 31, 2007. This marks a 7.2 per cent increase from 2006 and a 6.1 per cent decrease from 2005, the record-setting year with 40,530 sales.

“The continued strength of the real estate market is a reflection of the economic vitality seen throughout the province. With overall wages on the rise and unemployment in decline, buyers and sellers are left with a healthy and strong climate in which to operate,” says REBGV president Brian Naphtali.

Sales of apartment properties in 2007 increased 9.1 per cent to 16,456, compared with 15,088 sales in 2006, according to data from the Multiple Listings Service® (MLS®). Sales of attached units climbed 7.7 per cent to 6,799, compared with 6,310 sales in 2006. Detached property sales increased 4.9 per cent in 2007 to 14,795, compared with sales of 14,108 in 2006.

Overall, new listings for detached, attached and apartment properties increased 4 per cent in 2007 to 54,945 units, compared to the 52,818 listed in 2006. The aggregate residential sales in December 2007 climbed to 1,897, a 12.5 per cent increase over the 1,686 December sales in 2006. These numbers are in contrast to each of the first five years of the decade where December sales exceeded 2,000.

Sales of apartment properties in December 2007 rose 21.6 per cent to 901, compared to 741 sales in December 2006. The benchmark price, as calculated by the MLSLink Housing Price Index®, of an apartment property increased 14.4 per cent from December 2006 to $377,579.

Attached property sales in December 2007 rose 1.6 per cent to 317, compared with 312 sales in December 2006. The benchmark price of an attached unit increased 11.4 per cent from December 2006 to $456,941.

December’s sales for detached properties increased 7.3 per cent to 679 in 2007, up from the 633 detached units sold in the same period of 2006. The December benchmark price for detached properties increased 13.5 per cent from December 2006 to $730,399.

Bright spots in Greater Vancouver in December 2007 compared to December 2006:

DETACHED:
Richmond .......................... up 57.4 per cent (107 units sold up from 68)
Sunshine Coast....................up 51.9 per cent (41 units sold up from 27)

ATTACHED:
Burnaby...............................up 61.1 per cent (58 units sold up from 36)

APARTMENTS:
Burnaby.............................up 17.5 per cent (114 units sold up from 97)
North Vancouver..................... up 50 per cent (66 units sold up from 44)
Port Moody/Belcarra ........... up 91.7 per cent (23 units sold up from 12)
Vancouver East..................up 72.6 per cent (107 units sold up from 62)