April hath put a spirit of youth in everything.
— William Shakespeare, Sonnet XCVIII
Jay & Brenda News
Hope you caught the new mantra “drive till you can afford it”. Garry Marr of the National Post commented on the strategy of house buyers in Vancouver and Toronto. It is so expensive in both cities that those who want the Canadian dream of a detached home are looking farther afield. The President of the Kitchener-Waterloo Association of Realtors says that buyers are driving to their affordable mortgage. They stop when they say “I can afford to live here”. Buyers in the Lower Mainland are doing the same thing. All the satellite cities around Vancouver are feeling the pressure. Every detached listing in South Surrey all the way to Langley and then Abbotsford is receiving multiple over asking offers.
There would be more inventory if older homeowners who would like to cash out their equity to finance their retirement weren’t intimidated by the question of where to go. Many are moving out of the city but most feel the need to stay within an acceptable distance of family and doctors.
Visionary developers are talking about the need to build higher for density. A memorable quote from developer Jon Stovell appeared in a Sun article by Brian Hutchinson. In a speech to developers advocating 1000 foot towers Stovell states “Let’s finally let go of our bucolic fishing village past and embrace the reality of a city that we have become in the eyes of the world”. He is right. With our small land base Vancouver is going to have to find a way to create new homes. Stovell refers to the “horseshoe” of single family houses that surrounds Vancouver’s downtown core. According to Hutchinson the horseshoe takes up 70% of the landmass and houses 30% of the population. Even with the City of Vancouver relaxing single family ownership rules to include three residences per lot: main house, basement suite, laneway house, they are still under the same ownership and title is not divisible.
There was an interesting bio of the newly promoted city manager in The Sun recently. Sadhu Johnston is 41 and was recruited from the city of Chicago 7 years ago to be assistant city manager by Mayor Gregor Robertson when he met him at an environmental conference there. Johnston’s first city administrative job was with Cleveland Ohio. He cycles to work, is soft-spoken and respectful of other’s opinions. He considers it important to empower people. That said he knows he is not always going to be liked. He observed that the community planning and consulting process in Vancouver is much more inclusive and open than in many major cities. He is disappointed when residents come to Council to object to a plan and say they weren’t informed. It’s that they didn’t like the outcome, not that they didn’t get a chance to be heard. He did say that residents may get “a lot of heartburn” from the city’s answers to dealing with affordability and substandard and inadequate housing. Johnston believes that lack of affordability is threatening the fabric of the city and that decisions made or not made now will be affecting the city for many years into the future.
It is true about the extensive consulting process in Vancouver compared with elsewhere. Westbank Corp of Vancouver purchased a large piece of property in midtown Toronto. It was an iconic location and the local residents were worried about what would be built on the site. Westbank set up neighbourhood meetings to display their ideas and asked for input. Residents in Toronto are not informed or asked their opinions about condos going up around them. They were shocked and pleased. The process resulted in Westbank changing their concept from condo buildings to rental buildings. Everyone was happy. It”s interesting that CMHC has surveyed ownership of new condos in Toronto and Vancouver and discovered a large and increasing share of foreign ownership. CMHC is concerned about the impact on the Canadian economy if all those units come on the market at once.
Millennials living in Vancouver are not spending much time in their small living spaces. They are sociable and big spenders. Lots of fine dining, big bucks spent on entertainment according to Cineplex and many trips to the upscale shopping malls like Pacific Centre. This is a European lifestyle where nobody owns, everybody rents, and everybody goes out all the time. There has been handwringing over Millennials leaving Vancouver for more affordable cities like Victoria and Kelowna but the recent survey from the BC Real Estate Association shows that most are staying put. Any opportunity to purchase a condo or house comes through the Bank of Mom and Dad or an inheritance. Stats show that as a result of the increase in the real estate market Millennials have very high expectations of what they are going to inherit. Expectations that are not aligned with their parents plans for any windfall profits.
CMHC has warned banks about their concerns in the continually rising Vancouver and Toronto housing markets. The Bank of Canada has also expressed some reservations. It has not changed buying habits yet but it will impact mortgage loans. It may be that higher down payments will be required by the banks, or additional co-signers to a mortgage. Not a good idea for parents who need their future funds for retirement.
There will be a new Point Grey neighbourhood developed on the Federal/Provincial Jericho Lands fronting on 4th Avenue, West of Alma in Vancouver. The First Nations land claim has been settled and the Musqueam, Squamish and Tsleil-Waututh paid $480 million for the provincially owned 38.8 acres. In 2014 they partnered with the Canada Lands Company to purchase the adjacent 52 acre federally owned parcel for $237 million. West Point Grey Academy (where Trudeau taught French) has a lease on their portion of the provincial piece until 2020. It will be interesting to see what redevelopment is proposed. There are city development standards including levies for social housing, parks, schools etc. Nothing was said as to whether the property in belonging to the First Nations may be outside municipal building requirements. In West Vancouver Park Royal South was redeveloped in defiance of West Van bylaws and regulations because the land was leased from the First Nations.
The weather is so gorgeous it’s hard to keep our minds on business. It’s still busy out there. Sellers are holding firm on their listing prices and buyers are frustrated. On any nice family home there are multiple offers. On older homes on larger lots the builders are trying to buy for less to shore up their profit margin on the finished product.
In the Featured Article Vancouver Real Estate 2016: “May You Live in Interesting Times” below I talked about the astronomical prices on new ultra-luxurious condos in New York City where they are being referred to as “safety deposit boxes in the sky”. In Vancouver, Richmond and beyond there are multi-million dollar homes and condos that are safety deposit boxes in the ground or sky. Empty homes are a blight on a neighbourhood and a drag on their condo neighbours. In the interests of a glass being half full as per Julie’s philosophy the upside is the fact that the live in owners get to have the pools, gym facilities and concierge service to themselves with few owners taking advantage of the services and offshore owners paying their monthly fees.
The newspapers and social media have been so full of stories about real estate, many of them stretched very thin indeed, that it’s apparent that they are the main driver of revenue for news sites. Some bad realtors are getting a light shone on their unethical business practices and the rest of us good ones are happy to see them exposed. There are major changes coming to the real estate industry and I will be reporting them next month.
In the meantime we are working and enjoying Spring in Vancouver. Jay uses all the new technology tools to make it easier for clients to handle paperwork so there is much less fleeing around in the middle of the night to sign offers. I remember my early career in Toronto where 10-20 people would wait in the seller’s house at a multiple offer presentation. In those days the listing agent would serve wine and cheese and everyone would chat quite cordially. It didn’t mean we weren’t cut throat with our offers but there was a more polite and collegial atmosphere to the business.
Effi doesn’t care about real estate except for going out in the back garden to dig holes. One of her favourite activities if you let her outside unsupervised. The Woofer Walkers wear her out twice a week so the three regular daily walks she gets with Jay and me keep her healthy. She is a country girl, active and strong. We found that out when she fell off the patio at Gambier, did a back flip and survived. Loving life at 8 years of age!
Jay’s longtime friend Dave is visiting from Toronto. His family will join him soon but we are all having a good time together playing tourist. When Jay and I went out on our first date Dave came with us. We all went to a Bob Dylan concert in Toronto. Dave and his brother-in-law still go to every Bob Dylan concert within 1000 km of Toronto. When Julie was sick and I was working in her business while she had treatment and recovered I stayed at Dave’s house. He was most hospitable.
Alec and Lucia are busy parents and business owners. They have a burgeoning garden at home in Kittsee that grows wonderful fruit and vegetables. (It’s not like North Vancouver where you have to worry about bears turning up to enjoy the crops.) Homes in Kittsee have walled gardens, most are beautifully landscaped. Spring in Bratislava is a time of street festivals and fun. Europeans do know how to celebrate and Alec’s offices are located in the heart of the city on the Old Town square. Lucia’s Airbnb units are full in the tourist season so she is busy all the time. Constantin is a joy and in July we are looking forward to their visit and to introducing Lucia and C to all Alec’s extended family on the West Coast.
Kath and Stef are back at work after celebrating Stef’s birthday week in Cozumel Mexico. A tranquil hot weather holiday with great snorkelling, sailing and beach time in front of the hotel. Kath and Julie organized and Kath hosted a great birthday party for family and friends at Terroni’s on Adelaide a cool restaurant in Toronto. Hard to come back to TO to cold weather and the occasional snow flurry interspersed with warmer days to melt the snow.
Julie on first bike ride of year. Training for Ride to Conquer Cancer.
Inukshuk and snow on warm day.
Julie and Mary have been going like whirling dervishes. They have been renovating their house, travelling to Barbados, going to the cottage to help their friend Hanns with collecting maple sap to make maple syrup from his tapped trees. Julie and her Team have found the real estate market in Toronto as challenging as the one in Vancouver. Low inventory in both markets have impacted both buyers and sellers.
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 March 2016 Stats Package from the Real Estate Board of Greater Vancouver is also posted.
Dan Morrison, President of the Real Estate Board of Greater Vancouver states “March was the highest selling month the REBGV has ever recorded. Today’s demand is broad based. Home buyers are active in neighbourhoods across our region.”
“Strong job and economic growth in our province, positive net migration and low interest rates are helping to drive this activity,” Morrison said.
According to the Real Estate Board of Greater Vancouver MLS residential property sales of detached, attached and apartments reached 5,173 in March 2016, a.27.4% increase compared to 4,060 sales in March 2015.
March sales were 56% above the 10- year sales average for the month.
In March 2016 the number of residential properties listed for sale on the MLS in Greater Vancouver was 7,358. This is a decrease of 40.5% from March 2015 (12,376).
With the sales-to-active-listings ratio at 70% in March 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||March 2016||1 year change||5 year change|
|Townhouse||March 2016||1 year change||5 year change|
The following schedule shows the change in sales volume from March 2015 to 2016:
|Detached Home Sales|
|March 2016||March 2015|
|March 2016||March 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.
Enjoy the sunshine and showers.
Jay Banks & Brenda Kinnear