The raised West Dyke Trail looking north to the mountains.
The trail runs from Steveston to Terra Nova
and is popular for walking and biking.ou must not lose faith in humanity. Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty."
— Mahatma Gandhi
Jay & Brenda News
Love is all around us in February. It's a good reminder of how to treat people we meet and how we wish to be treated in return. There has been lots in the news lately of how some in our profession have not been treating the public properly. Although it is not PC to say so, it seems clear from all the reports that it is a small group whose business practices were learned in another culture and whose clients don't expect anything better because they are gaming the system too.
Jay and I have laughed over the scene in the film "Casablanca" where Claude Rains as Captain Renault, the chief French law enforcement official in Casablanca, has just been chastised by the Nazi Occupation Force Colonel for allowing gambling in Rick's Cafe. As Captain Renault says "I'm shocked--- shocked--- that gambling is going on in here" the waiter arrives to hand him his winnings. That's the analogy of what's going on in our out of control real estate market. Right now every regulatory body, every political leader including the Real Estate Board of Greater Vancouver, the Real Estate Council, the Superintendent of Insurance, the Premier is trying to paper over their culpability. "Oh no, we had no idea"; "oh no, we didn't know that homes are being left empty as investment vehicles, oh no, we thought people were coming to live in them and become part of the community"; "oh no, we didn't believe the letters we received in regard to suspect business practices"; "oh no, we didn't follow up with audits of offices where there were indications of fraudulent practices by realtors and clients not reporting their tax evasion and money laundering activities to CRA"; "oh no, we didn't think a speculation tax or home ownership rules like they have in Australia were important. Oh no, we weren't worried about getting re-elected." Oh no indeed. Well everyone involved is running for cover today.
The raised West Dyke Trail looking north to the mountains.
The trail runs from Steveston to Terra Nova
and is popular for walking and biking.
We can give thanks to the Globe and Mail for spending the money to investigate the high prices in the Vancouver real estate market and for having the courage to publish the article with names and ethnicities attached. The news was not news to the vast number of honest ethical professional above board realtors and their clients who don't get a chance to offer on available properties because they have been sold by secret assignment to offshore investors with everyone in the chain taking a profit except the seller and the final buyer who is paying the assignment premium plus the Land Transfer Tax (formula: 1% on the first $200K, 2% on the balance of the purchase price.) When homes are offered on the open market the offshore investors with their pots of suspect funds make pre-emptive bids so local buyers are shut out. Part of the problem is that the new mortgage rules have made the banks so skittish they require weeks of paperwork to approve financing for most local buyers and the sellers are not going to wait for their windfall profit either.
FYI: Lots more news on this subject in the Featured article blog link below: Real Estate in January 2016: Vancouver Still the Wild West in Terms of Unethical Practices
A market is created by supply and demand and this one has been fuelled by lack of available developable land, the long run of low interest rates, the depreciation of the Loonie in relation to other currencies, particularly the US which makes our real estate prices discounted 40% for most foreign buyers. The fact that the city was showcased by the 2010 Winter Olympics has inspired people from around the world to come here and to buy a second home if they can afford it. When the TED (Technology, Entertainment, Design) Conference relocated from Long Beach and Palm Springs CA to Vancouver and Whistler BC in 2014 the leaders stated it was because of the international flavour, the freedom and tolerance of Vancouver plus its natural beauty. It also helped that many attendees and speakers from around the world could more freely visit Canada than the US.
The raised West Dyke Trail looking north to the mountains
Jay and Effi listening to birthday speeches after opening his cards and gifts
You can be sure the cry from Gregor Robertson, the Mayor of Vancouver, for a speculation tax to make the market more affordable is again in his political best interest. The Vision council has managed to drive most industry and jobs out of the city with their rezoning of industrial lands for the larger tax base of residential units. This rezoning was to be combined with green jobs, particularly in the tech sector. It turns out the leaders of the tech sector are telling everyone that they can recruit but not retain the young IT workforce they need to grow and succeed. Young employees like the ideal lifestyle of Vancouver until they come up against housing costs in the city. They are in high demand and once they start thinking of family formation and buying a house they leave town.
Interestingly there is a move afoot to attract more head offices to Vancouver. As a city we have not attracted the high flying companies to locate here, especially in comparison with Calgary. We have resource industry head offices and small company head offices but the big players are in Toronto or Calgary which is focussed on the energy industry. However, anyone thinking of moving here runs into the high price and unavailability of housing, all the environmental and aboriginal concerns, splintered municipal governance (who each want head offices in their Town Centres), high taxes and red tape. The BC Business Council is hoping that can be overcome with access to international shipping, climate, beauty and quality of life. Let's hope so too.
Port Metro is begging for land around the Agricultural Land Reserve in Delta in order to expand their support services and infrastructure at Roberts Bank. The Port has been buying up farms in Richmond that are close to the Fraser River. Again a clash of values. The Port is the biggest outlet in Canada for imports and exports of goods and natural resources. It becomes a question of whose ox is going to be gored. Are we about to destroy the Great Pacific Flyway and all the birds who depend on fields and foreshore for food? Are we now in this time of climate change and drought going to trust California to produce all our food? Is our environment to be degraded in order to accommodate the needs of the rest of Canada? These are not easy questions and there are no obvious answers. The CEO of Port Metro, Robin Silvester, publicly states that he supports the Agricultural Land Commission and wishes there was an Industrial Land Commission in place to prevent municipalities from rezoning industrial land to residential.
Australia has the same problem with rising home prices and lack of affordability in Sydney and Melbourne. Vancouver and Sydney are among the most expensive cities in the world in relation to incomes. In Australia they have much tighter foreign ownership rules. The country tracks all buyers of real estate and foreign owners from all over the world are only allowed to purchase new houses or apartments. Last week the Conservative government ordered the sale of eight multi-million A$ properties, mainly Chinese owned, although offending owners have come from Canada, China, India, Malaysia, the US. So far in the latest crackdown 27 properties have been ordered sold with heavy penalties to the owners for breaching the Australian laws on foreign ownership. In the last few months the government has investigated 1300 property sales with 800 presently under investigation. In Australia some economists blame the low interest rates and locals speculating in real estate. Some say that the stats there show that foreign buyers are only 15% of the market. One researcher said he checked the water bills for Melbourne and 60,000 homes did not turn on their water for a year. It's a little different in Vancouver where no level of government has tracked foreign ownership or water usage and there is no restriction on foreign buyers stacking up vacant investment properties.
According to Barbara Yaffe of the Vancouver Sun we can expect no changes from the Provincial Government in the upcoming Budget. She writes that when Premier Christy Clark stated last year that she would do nothing that might harm people's home equity she closed out any meaningful addressing of house flipping and foreign buying that are at the root of the rising prices. This means that any talk of enhancing affordability will be peripheral such as minor changes to the Property Transfer Tax to assist first time buyers. Nobody in government wants to antagonize a large segment of the people who actually go out to vote...older homeowners.
However, when the public wakes up to questionable business practices everyone talks about fairness and frowns upon the politicians. The Finance Minister actually smiled upon a Green Party private members bill that would revive the old Land Title law whereby the citizenship or Permanent Resident or foreign investor status and location in Canada or elsewhere of the buyer's primary residence was recorded with the title which sounds like there may be some news in the forthcoming Budget. Some columnists thought that the Finance Minister's warm response was to pre-empt suggestions from the NDP in the Legislature. Other suggestions probably more difficult to enact include one to widen the Land Transfer Tax to include charging LTT to changes of ownership in a Contract before the title is finally registered. More anon.
As always it's back to 'old clothes and porridge' (a favourite expression of my Scottish Grandmother) after the Holidays. Lots of family, friends, clients head for sunny climes. The real estate market picks up (didn't really slow down) and we go back to work.
We are fortunate to have a raft of family birthdays early in the year. We just celebrated Jay's natal day with a big party including dinner, speeches and toasts. The highlight of the Birthday Week was the gift to Jay of a new 55" LG Smart TV. He is thrilled with it, particularly because his nephew and brothers-in-law have stopped teasing him about his old one with its miniscule screen (we bought it in 2008 to watch the Super Tuesday Primaries in the Obama-Hillary Clinton original matchup). I imagine Jay will be the one hosting future sports viewing parties.
Kath was here for a few days on her way home to Toronto from her visit with Aunties Jane & Mo at Jane's house on the island of Hawaii. We were so happy to see her and she was pleased to go with Jay to Best Buy in North Van to pick up the TV that Jay and Russ Bellinger had picked out. Effi and I stayed out of the way while Frick and Frack set it up. Kath and Jay did a good job and it works perfectly. We are now connected to Shaw, Apple and Google Chromecast. I have been enjoying some great concerts in brilliant sound and colour. Now that Kath is home again the weather has dipped into subzero freezing ranges. You can see how cold it is in Toronto by how bundled Stef and Kath are beside the lake. They are heading south in March to stay with family in Palm Springs. A welcome respite.
Julie and Mary have been up at the cottage where it is really cold. Julie said the dogs ran around in -18C weather but couldn't wait to come back in at -33C degrees. In January when it wasn't quite so cold some friends stayed with their children at the cottage while Julie and Mary were busy in Toronto. They are an active family so swept the snow off a section of the lake so they could enjoy the old-fashioned Canadian pastime of outdoor skating.
Julie was asked to be the Canadian keynote speaker at the Keller Williams 2016 Family Reunion in New Orleans LA with thousands of real estate associates from around North America but she declined. She said that she and Kath had spent about 3 months helping their father to recover from his nearly fatal bout with Atypical Pneumonia and she thought she should go back to work. Especially since she and Mary have a trip to Barbados planned in March. Kath and Julie are happy to report that their dad is now home with Carolyn and making good progress in his recovery.
We always love news and pics of our beloved 10 month old grandson, Constantin. Lucia reports that he is 12 kg, with 7 teeth, some words/sounds, walking holding onto things, looks at books without tearing them up and touches his finger on technology devices. Alec and Lucia are devoted parents with a beautiful child. They also work long hours in their business. Young families are under such pressure today. We hope they will visit us in BC this summer where we can have fun in the parks with visits to Gambier Island and other beauty spots.
FYI: We find that working with clients at every stage of life: buying first condo homes, moving up to family size townhomes or detached, then downsizing from the large family home to a condo again keeps us busy. We hope that Life is good for you too.
Real Estate News
The complete January 2016 Stats Package from the Real Estate Board of Greater Vancouver is also posted.
Darcy McLeod, President of the Real Estate Board of Greater Vancouver states "Fundamental economics are driving today's market. Home buyer demand is at near record heights and home seller supply is as low as we've seen in many years."
"The MLS is the most powerful real estate marketing system in the country." McLeod said. "If you're thinking of selling, it's important to talk with your REALTOR about putting your home on the MLS system to ensure your property gets maximum exposure."
According to the Real Estate Board of Greater Vancouver MLS residential property sales of detached, attached and apartments reached 2,519 in January 2016, a 31.7% increase compared to 1,913 sales in January 2015.
The number of residential properties listed for sale on the MLS in Greater Vancouver is 6,635. This is a decrease of 38.6% from January 2015 (10,811).
With the sales-to-active-listings ratio at 38 per cent for January 2016, it remained a seller's market which typically occurs when this ratio exceeds 20 percent for a sustained period of time.
The REBGV Home Price Index includes Benchmark Prices for consistent comparisons. Benchmarks represent a typical property within each market. The benchmark property descriptions have been updated to reflect current buying trends.
|Home Price Index / Benchmark Prices|
|Detached||January 2016||1 year change||5 year change|
|Townhouse||January 2016||1 year change||5 year change|
The following schedule shows the change in sales volume from January 2015 to 2016:
|Detached Home Sales|
|January 2016||January 2015|
|January 2016||January 2015|
Change is in the air. We’re still advising clients to take advantage of the continuing low interest rates available now whether you are moving up or down in the market. You will be glad that you did so at this time!
We thank you for your referrals and look forward to assisting you or any of your friends and family with future real estate needs.
Wishing you a Happy Valentine's Month,
Jay Banks & Brenda Kinnear