March 3, 2008
Property Sales Moderate in February
The number of sales of homes and other properties in the Greater Victoria area moderated in February. There were 619 sales through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) in February, down from the 707 sales in the same month a year ago. There were 464 sales in January.
Victoria Real Estate Board President, Tony Joe, says the market continues to be well-balanced with strong demand for homes that are realistically priced coupled with a growing selection of available properties for sale. "The total number of properties available for sale rose to 3,311 in February - a 13 per cent increase over February of last year," noted Joe. Last month over 27 per cent of single family homes sold for under $450,000 while nearly 37 per cent of condominiums sold for under $275,000. At the higher end of the market, Joe noted that there were nine sales in Greater Victoria and one sale on the Gulf Islands of over $1 million.
The average price of single family homes sold in February in Greater Victoria was $587,295; the median price was lower at $543,500. The six-month average for single family homes was $588,826. The average price of all condominiums sold in February was $333,408; the average for the last six months was $334,577. The median was again lower at $299,450. The average price of all townhomes sold last month was $422,607; the six month average was $426,685. The median price was $395,000.
MLS® sales last month included 316 single family homes, 177 condominiums, 73 townhomes and 13 manufactured homes.
January 28, 2008
Secondary Suites: Illegal but Pervasive
They're the not-so-secret secret in many municipalities, contentious square footage that can cause huge rifts in a community and between neighbours.
But secondary suites are a fact of life in several local municipalities and now even Oak Bay - often viewed as the stodgiest of communities -- is looking at making them legal.
"It's a great big sleeping dog we've let lie for a long time," said Coun. Nils Jensen. "There are secondary suites throughout the community already."
About one in eight homes has an illegal secondary suite, said Nigel Beattie, Oak Bay's head of planning. That's a bit of a guess, he said, since people tend to be quite secretive in putting them in.
One of the key tip offs is the garage door that is suddenly replaced with a nice set of French doors. Then there's a new light installed above the door, followed by new curtains on all the basement windows.
"We can be fooled. Sometimes, people are just fixing up their basement, but generally, it's a suite," said Beattie.
The best source of finding illegal suites is from real-estate ads. Some real-estate agents advertise the revenue-helping suite, Beattie said, even though they're not legal in the municipality. The other is an inquisitive neighbour.
But unless there are complaints about the suite -- noise and parking are the main concerns - they're generally left alone, he said.
"To be honest, we get very few complaints, between five to 10 a year. Suites seem to be settled in a lot of neighbourhoods."
Jim Bailey is a real-estate agent who lives in Oak Bay. He doesn't advertise suites in his listings, even when they're there. "Some neighbour will come along and report it to the bylaw enforcement officer, and the stove will have to be removed and decommissioned."
He knows of many suites that have been rented in homes for years with no complaint, because the tenant is quiet and doesn't park in the spot the neighbour has parked for years.
"Generally speaking though, Oak Bay types don't want to see tenants. They don't seem to like the idea of someone transient, and would rather have a homeowner," Bailey said.
Acknowledging suites as legal could be a big help to young families, he said. Most can't afford to buy in Oak Bay without some revenue help. Older people too like the idea of extra retirement income from renting out a basement.
For Deborah Curran, a land-use lawyer and a co-founder of Smart Growth BC, legalizing suites is just facing reality. "They're there anyway. Let's daylight them," she said. "We might as well have a more formal and regulatory process, particularly if we are interested in knowing what the impact is on our infrastructure."
Oak Bay council asked municipal staff for a report on suites, and will form a committee of council and community members to look into it.
"It's possibly a contentious issue," Mayor Christopher Causton said.
But with no land available for development, more residential space has to come from somewhere. "It's a way to gently increase density, allow homeowners to generate extra money and it could allow older people to remain in their homes," Causton said.
Oak Bay has about 10 new houses a year. About eight are created from knocking down older houses, and the other two from creating new lots on larger lots.
Oak Bay bylaws allow each home to have two boarders, but not a suite. Saanich too is considering suites, but is taking it very slowly. A questionnaire put out in conjunction with the municipality's review of its Official Community Plan showed that about 75 per cent of those who responded were in favour of legalizing suites. View Royal has legalized them, as has Sidney and most of Victoria, with suites in the Gonzales area right next to the Oak Bay border.
Legalizing suites allows municipalities to regulate them, and make sure they're built safely and to code. "If we put our heads in the sand, we'll lose the opportunity to create a more safe situation and more affordable housing," Jensen said.
They could also provide affordable housing, although that's not a given. In Kelowna, for example some renovated carriage houses rent for more than the house would.
There are about 150,000 illegal suites in the province. They account for about 20 per cent of the province's rental housing supply. Source: Times Colonist (Victoria)
January 2, 2008
Real Estate Records Broken in 2007
The value of all property transactions through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) hit a new record of over $4.1 billion in 2007, up from $3.3 billion in 2006. The value of single family home sales was over $2.5 billion while the value of condominium sales was over $756 million. Victoria Real Estate Board President Tony Joe noted that both sales and prices for all major property types increased last year. "Last year was another exceptional year for the local real estate market. The total number of sales increased over 12 per cent while the overall average price for single family homes rose 8.5 per cent; the average for condominiums rose over 11 per cent and the average for townhomes rose 10.5 per cent," said Joe.
Meantime, the sale of 14 single family homes in Greater Victoria over $1 million pushed the average price to a new record high of $624,450 last month; the median price, however, was considerably lower at $536,000. "It’s always important to bear in mind that the average price in a given month can often be significantly affected by the sale of high-priced homes," noted Joe. The six-month average for single family homes in December was $581,419.
The average price of all condominiums sold in December was $332,793; the average for the last six months was $319,980. The median was again lower at $292,900. The average price for townhomes sold last month was $445,960; the average for the last six-months was $415,648. The median price was $387,900.
There were 408 MLS® sales last month, up from 385 sales in December of last year. There were 623 sales in November. Sales last month included 202 single family homes, 120 condominiums, 46 townhomes and 8 manufactured homes.
There were 2,799 properties listed for sale on the MLS® system at the end of last month, up from the 2,650 properties in the same month a year ago.
Source: Victoria Real Estate Board
December 12, 2007
First-time homebuyers Struggle
Cheques from Mum and Dad, new rules about income from illegal suites and longer amortization periods on mortgages have allowed first-time buyers to get into the Victoria housing market despite soaring house prices according to mortgage experts.
While the median sale price of a single-family home in Victoria has ranged from between $451,000 and $520,000 through the first 11 months of the year, mortgage brokers say first-time buyers are still managing to make it happen.
But they are often not alone in doing it. "It really is tough for kids if they don't have family support, and I'm talking about big-time family support," said mortgage expert Valerie Wise of Mortgage Intelligence. "I see families coming up with $50,000 and $70,000 for down payments to help out the next generation."
According to Lori Newberry, senior personal banking officer with Scotiabank, those down payments are often in lieu of inheritances or simply parents purchasing homes for their kids.
"Parents are really stepping up to the plate here and taking equity from their own homes and helping out with a down payment," she said.
And many mortgage brokers point out that without that parental largesse, many first-time buyers would be out of luck considering they are often young, laden with school debt and dealing with starting salaries.
"To get into a condominium now [in Victoria] you need an income of $50,000 a year, and that's a good salary," said mortgage broker Scott Travelbea of the Mortgage Group. He adds that if there is no parental help coming, single people are often out of luck. "Before, it was individuals buying condos, and when they became couples they would buy a home. Now it's couples working together to buy a condo."
First-time homebuyers did catch a break over the last year with a change in how illegal suite income is treated by lenders.
Now, in some cases, homebuyers are permitted to count 80 per cent of suite income against their mortgage -- for example, if the suite income is $900, they can apply $720 to what they can afford as a mortgage. That may allow some first-time buyers to look at single-family homes rather than condos.
Previously would-be homebuyers were only allowed to count 30 per cent of that income. "A lot of them are now looking for homes with suites or with potential for suites," said Travelbea. "It helps people purchase a property in a higher price range."
Creative financing options are helping, too. According to Century 21 Canada president Don Lawby, most first-time homebuyers are using mortgage brokers to help them sort through terms offered by banks and lending institutions.
Lawby, whose company released a survey suggesting first-time homebuyers were managing to get into the market despite soaring costs, also pointed out by extending the amortization period to 40 years, from the more typical 25, buyers can create payments they can live with.
"There's a lot of innovation out there allowing people to buy with less money down as well," added Travelbea, noting a number of first-time buyers are opting to put down less than five per cent as a down payment.
"Lenders have become more flexible," he said, though he was quick to add "sometimes that flexibility isn't always the best thing."
The Century 21 survey found Victoria was one of the toughest B.C. markets to break into, pointing out a typical first home is a 1,000 square foot condo in the Gorge area for $260,000, or $260 per square foot.
The survey suggested the typical first-time, single-family home is a 1,560 square foot two-storey house near Hillside Shopping Centre for $465,000 or $298 per square foot.
Statistics Canada also weighed into the homebuying discussion yesterday with the release of data showing there is a relationship between young people staying at home with their parents -- presumably to save money -- and home ownership.
While the data did not reach conclusions as to why, it did say 74 per cent of young adults who live with their parents until age 24 or 25 reported owning a home in their 30s, while 67 per cent of kids who left home at age 18 or 19 reported owning a home in their 30s.
The survey also pointed out that staying in the parental home longer did not translate into a better chance of home ownership as only 61 per cent of those who left the home between the ages of 28 and 30 reported owning a home in their 30s
Source: Times Columnist (Victoria)
December 11, 2007
National Housing Starts Strong in November
British Columbians started construction on 3,718 new homes in November, which puts the province on pace to add 43,600 units to its housing stock by the end of the year, Canada Mortgage and Housing Corp. reported yesterday.
Nationally, the seasonally-adjusted-annual rate of new housing construction reached 227,900 units at the end of November, virtually unchanged from the October estimate of 227,600.
"Housing starts remained strong in November and are consistent with our new-home construction forecast for 2007," said Bob Dugan, CMHC's chief economist. "The strength in November is attributable to the good performance of single-detached home starts, which reached their highest level since March 2006."
In November, the seasonally adjusted rate of home construction increased in two of Canada's five regions, with B.C. recording the biggest increase in urban starts at 16.9 per cent.
In Ontario, the increase in pace was 12.7 per cent. On Vancouver Island, housing starts slipped in November as builders poured foundations on 350 projects, compared with 422 the previous month.
CMHC senior market analyst Peggy Prill said 2007 housing starts on the Island are eight per cent below last year's levels, although the 4,145 projects over the last 11 months are still "historically" high. In 2006 after 11 months, contractors had 4,522 housing units under their tool belts.
Prill said rising construction costs, labour shortages and the complexity of many planned multifamily projects has meant delays in projected starts and prolonged construction periods during 2007.
Nanaimo is the only Island region to show increases in building this year with 749 housing starts to the end of November, compared with 663 over the same period a year ago. The Harbour City also showed the largest increase in November with 85 starts compared with October's 56.
Greater Victoria began construction on 2,334 homes, condominium units and apartment suites so far this year, 253 fewer than at the end of November 2006.
New housing slipped in the region from 282 starts in October to 174 in November. Saanich was the leading area with 66 starts -- a total that included 38 apartment suites. Victoria had 36 units built, including 23 apartment suites. The leading regions for single-family homes were Sooke, with 15 built during November, and Langford, which added 14.
Courtenay builders have put up 599 housing units so far in 2007, down 28 from 2006. Although Parksville-Qualicum recorded 31 new starts in November, up from 17 in October, the region's pace has slowed considerably in 2007, with only 205 homes built compared with 329 through 11 months of 2006.
Duncan also had a slower pace with 21 starts in November, five fewer than the previous months, and 258 so far this year, down from the 316 underway over the same period a year ago.
Nationally, the seasonally adjusted annual rate of housing starts in urban areas rose 0.2 per cent last month from October, with single units up 12.8 per cent to 95,400.
Multiple-unit starts fell 9.8 per cent to 96,600 units, CMHC said. Urban signle starts were up in all regions except the Prairies. Only the Atlantic region and British Columbia saw increases in urban multiple starts.
CMHC said housing starts in rural areas totalled 35,900 units in November. On a non-adjusted basis, combined rural and urban starts ere up 2.7 per cent in the first 11 months of 2007 from the same period last year, it said.
Actual starts in urban areas rose 0.1 per cent for the year. Urban single-unit starts fell 4.2 per cent from the same 11-month period in 2006, while multiple starts rose 4.2 per cent.
"Overall, the Canadian housing sector continues to outperform expectations, and is in stark contrast to its U.S counterpart where the recession in housing sector continues unabated," said Millan Mulraine, economics strategist at TD Securities.
"We continue to expect the Canadian housing market to remain reasonably strong, though some moderation in the first half of next year should be expected."
Source: Times Colonist (Victoria)
December 3, 2007
November Real Estate Market
Strong Sales, Record Prices
The Victoria area real estate market continued to show exceptional strength last month with strong sales and record average prices for single family homes and townhomes. There were 623 sales through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) in November, up from the 571 sales in the same month a year ago. There were 708 sales in October of this year.
Victoria Real Estate Board President, Bev McIvor, noted that 16 sales of over $1 million pushed the average price of single family homes in Greater Victoria to a new record high of $596,586. "As always, it’s important to note that high end sales have a significant impact on the average price and that the median, or mid-range price, was considerably lower at $510,000." McIvor noted there were also three sales over $1 million on the Gulf Islands last month and that the average price of all townhomes sold also reached a new record high of $473,758. "The high demand and robust prices show continued strong consumer confidence in the market," added McIvor.
The six-month average for single family homes was $576,230. The average price of all condominiums sold in November was $311,844; the average for the last six months was $324,255. The median was again lower at $292,000. The six month average of all townhomes sold last month was $411,262. The median price was $421,750.
MLS® sales last month included 335 single family homes, 179 condominiums, 63 townhomes and 14 manufactured homes.
There were 3,196 properties listed for sale on the MLS® system at the end of last month, up slightly from the 3,158 properties in the same month a year ago.
Source: Victoria Real Estate Board
Friday, November 16, 2007
Average House Price Expected to
Surpass $600,000 Next Year
Average house prices in Greater Victoria are expected to top $600,000 next year, but the sticker shock won't put off buyers, say analysts with the Canada Mortgage and Housing Corporation.
Figures released yesterday at the federal agency's Victoria Housing Outlook Seminar indicated residential construction and sales in both the capital region and the province will continue at above-average levels, pushing new and existing home prices higher in 2008.
The rate of that increase is expected to slow to six per cent next year, however -- down from 12.1 per cent forecast for 2007, and the 17.7 per cent recorded in 2006. That dovetails with the Canadian Real Estate Association's predictions yesterday that national sales volumes would slow next year.
After several record-breaking months, the average price of a single-family house in Greater Victoria dropped in October to $556,222, from $584,193 in September. Last month's average still topped October 2006's average of $523,677.
Peggy Prill, senior market analyst at CMHC's Victoria branch, emphasized figures recorded since 1979 point to a stable, albeit cooling, housing market. Prill, who is frequently asked whether Victoria's real-estate market is in a bubble, said the current situation isn't like the housing bubble of 1980 and 1981, where prices rose dramatically then dropped sharply in a four-year-decline. The memory of that burst bubble still looms large in Victoria's building and real-estate community.
"We're not in that situation right now," said Prill. "We're just looking at a slowing of price growth for the next couple of years."
Provincial economist Carol Frketich agreed, saying it would take a "catastrophic" event, such as a spike in interest rates, global financial correction or a recession, to trigger a price decline.
Frketich said the province's high employment rates, robust construction and mining sectors, thriving finance and insurance industry and projected growth in health care due to an aging population all point to positive economic growth that will fuel the housing market.
Other favourable factors include stable mortgage rates, government surpluses, rising business and residential investing and brisk consumer spending.
It all figures into Victoria's picture, added Prill, making this city's economy "almost as hot as Calgary."
There are potential threats to the housing market, however, including a slowing in the tourism industry and reduction in net exports due to the sudden strength of the Canadian dollar, and reduced consumer spending in Canada as more people flex their spending muscles south of the border.
"Remember when we used to go through the U.S. border wearing 10 layers of clothes?" said Frketich. "Well, that's happening again."
B.C. has remained untouched by the subprime mortgage meltdown that sparked the housing crisis in the U.S., which Frketich attributes in part to more prudent management over the Canadian mortgage market.
"One year ago, the number of U.S. subprime loans stood at 40 per cent," said Frketich. "That's now dropped to about 10 per cent." Compare that to Canada, where the low end of the mortgage market consists of near-prime mortgages -- which make up only 10 per cent of our market -- and Frketich says it's easy to see how Canada has been insulated from the U.S. crisis. Nevertheless, Frketich said there will be ripple effects, since the crisis has cooled American consumers' spending.
"Local consumer spending in British Columbia affects the local economy, but U.S. consumer spending affects the world."
Source: Times Colonist (Victoria)
Saturday, June 16, 2007
Victoria legalizes 'in-law' suites
Property sellers will be updating their dictionaries and striking out furtive euphemisms that pepper some Victoria real estate listings.
Descriptors like "extra accommodation," "nanny and in-law suites" and "basement ready for your ideas" are words of the past.
That became effective yesterday when the City of Victoria made good on its promise to pass a bylaw legalizing secondary suites in family homes. The bylaw will take secondary suites "out of the closet and into the real world," said Ray Blender, manager of Re/Max Camosun.
Blender said selling homes with illegal suites had been tricky for real estate agents concerned that the purchasers were made fully aware that they could be out of income should the city enforce its bylaw.
"Now we'll be able to be more honest that there is a suite in the basement to help with the mortgage," said Bev McIvor, president of the Victoria Real Estate Board. She sees more and more people shopping for homes with secondary suites to help with the cost of ownership.
Blender said it would be great if secondary suites were made legal throughout the region, a sentiment that was echoed Thursday night by a Saanich resident Ian Graeme who travelled from his municipality to congratulate Victoria on taking the step.
Victoria has been inching forward on the bylaw over three years and McIvor worried that it never would really happen.
There was some opposition to the bylaw. Rockland Neighbourhood Association member Janet Simpson gave a lengthy appeal for the bylaw not to apply to that neighbourhood, fearing it would encourage demolition of smaller character homes and the creation of "block after block of ugliness that Vancouver has already mastered."
But an overwhelming number of people spoke in favour of the change.
Al Kemp, chief executive officer of the Rental Owners and Managers Society of B.C., told the city it might see more cash from the federal government via transfer payments under the new bylaw because some residents living in illegal secondary suites may not in the past have been counted in censuses.
Source: Times Colonist (Victoria)
The population of the Victoria CMA increased 5.8 per cent,above the provincial average of 5.3 per cent, to 330,088 individuals between 2001 and 2006. The region continues to attract a large share of migrants over 55 years of age. Adult lifestyle and retirement buyers are expected to comprise a large proportion of homebuyers in Victoria over the next decade. MLS® sales through the Victoria Real Estate Board declined 6 per cent last year to 7,480 units. This moderation of home sales mirrors BC’s other large urban areas, where some consumer resistance to market prices is impacting demand. Market conditions have shifted away from a strong sellers’market and are forecast to stay in strong balanced conditions over the next two years. However, while residential sales are not expected to surpass the ten-year high of 7,980 sales recorded in 2005, they are forecast to remain well above the ten-year average of 6,500 sales. Upward pressure on home prices is forecast to continue through the forecast horizon. Strong local economic conditions will operate to maintain robust job growth, low unemployment and rising wages. As a result, household financial conditions will improve with consumer confidence remaining high. The average MLS® price hit $426,722 in 2006, and is forecast to increase 7 per cent to $458,000 this year and 6 per cent to $485,000 in 2008. Home price growth is not expected to increase as rapidly as in the last few years, but will remain well above the rate of general price inflation. Housing starts climbed 33 per cent to 2,739 units last year. While single detached housing starts fell 5 per cent, multiple starts jumped 67 per cent, contributing to the gain in total starts. The combination of higher new home inventories and a tight labour market for the skilled trades is expected to curb housing starts through 2008. Housing starts in the Victoria CMA are forecast to dip 9 per cent this year to 2,505 units, and a further 4 per cent to 2,400 units in 2008.
Source: British Columbia Real Estate Association
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