What’s New

Vancouver, BC – February 15, 2018. The British Columbia Real Estate Association (BCREA) reports that a total of 5,306 residential unit sales were recorded by the Multiple Listing Service® (MLS®) across the province in January, an increase of 18.3 per cent from the same period last year. The average MLS® residential price in BC was $721,477, up 16.2 per cent from the previous year. Total sales dollar volume was $3.83 billion, a 37.4 per cent increase from January 2017.

“BC home sales dipped 10 per cent from December to January, on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “New mortgage rules requiring conventional borrowers to qualify at a higher interest rate likely contributed to the decline in home sales last month. The impact was magnified by a strong December as many households advanced their purchase decisions ahead of the policy’s implementation.”

Despite the decline in January transactions, the seasonally adjusted annual rate of home sales was 101,800 units.

Compared to January 2017, market conditions tightened in all BC board areas except Victoria, where the sales-to-active listings ratio declined from 46.3 per cent to 40.5 per cent. Despite this decline, Victoria remains in strong sellers’ market territory. Total active listings in the province were down 8.6 per cent to 20,901 units, compared to the same period last year.

Steady sales and diminished listings characterize 2017 for the Metro Vancouver housing market

After reaching record levels in 2015 and 2016, Metro Vancouver home sales returned to more historically normal levels in 2017. Home listings, on the other hand, came in several thousand units below typical activity.

The Real Estate Board of Greater Vancouver (REBGV) reports that sales of detached, attached and apartment properties reached 35,993 on the Multiple Listing Service® (MLS®) in 2017, a 9.9 per cent decrease from the 39,943 sales recorded in 2016, and a 15 per cent decrease over the 42,326 residential sales in 2015.

Last year’s sales total was, however, 9.7 per cent above the 10-year sales average.

“It was a steady year for home sales across the region, led by condominium and townhome activity, and a quieter year for home listings,” Jill Oudil, REBGV president said. “Metro Vancouver home sales were the third highest we’ve seen in the past ten years while the home listings total was the second lowest on record for the same period.”

Home listings in Metro Vancouver reached 54,655 in 2017. This is a 5.1 per cent decrease compared to the 57,596 homes listed in 2016 and a 4.5 per cent decrease compared to the 57,249 homes listed in 2015.

Last year’s listings total was 4.4 per cent below the 10-year listings average.

“Market activity differed considerably this year based on property type,” Oudil said. “Competition was intense in the condominium and townhome markets, with multiple offer situations becoming commonplace. The detached home market operated in a more balanced state, giving home buyers more selection to choose from and more time to make decisions.”

The MLS® HPI composite benchmark price for all residential properties in Metro Vancouver ends the year at $1,050,300. This is up 15.9 per cent compared to December 2016.

The benchmark price of condominiums increased 25.9 per cent in the region last year. Townhomes increased 18.5 per cent and detached homes increased 7.9 per cent.

“Strong economic growth, low interest rates, declining unemployment, increasing wages and a growing population all helped boost home buyer demand in our region last year,” Oudil said.

December summary

Sales of detached, attached, and apartment properties totalled 2,016 in the region in December 2017, a 17.6 per cent increase from the 1,714 sales recorded in December 2016 and a 27.9 per cent decrease compared to November 2017 when 2,795 homes sold.

Last month’s sales were 7.5 per cent above the 10-year sales average for the month.

“As we move into 2018, REALTORS® are working with their clients to help them understand how changing interest rates and the federal government’s new mortgage qualifications could affect their purchasing power,” Oudil said. “Only time will tell what impact these rules will have on the market.

The developer of an 89-acre historic industrial site in Coquitlam is attempting to jettison warehouses and workspace in favour of 1,000 more condos, though an industrial shortage is driving prices to record highs.
Coquitlam’s industrial vacancy rate is 1.6 per cent, which is up from a record low of 0.5 per cent a year ago, according to commercial agency Avison Young.
Industrial lease rates have shot up to an average of $11.07 per square foot, third-highest in Metro Vancouver. Scarce industrial sites are topping $1.2 million per acre.
Industrial tenants had looked to the development of 800,000 square feet at the former Fraser Mills sawmill, which would represent 10% of the city’s total industrial inventory.
But developer Beedie Development has submitted a revised proposal to Coquitlam council that cuts 30 per cent of industrial on the waterfront site.
The company’s plans, which have yet to receive all of the required council approvals, are substantially different from 2008 when it first gained approval for the redevelopment.
The developer wants to add 1,000 more residential units to the 3,400 to 3,700 units currently approved, which would mean increasing the number of towers from 10 to 15.
At least one would be 41 storeys, compared with a maximum of 12 floors under the original plan. Beedie also apparently plans to speed development by cutting the construction phases from 16 to nine.
Fraser Mills industrial space would be reduced by 252,000 square feet.
If approved next year, it would be built out over the next decade, according to Beedie.
Ryan Beedie, president of Beedie Living, said the changes will make the development “more economically viable.”
Currently, new highrise condominiums in Coquitlam are selling for north of $750 per square foot.
Beedie Living itself has experienced Coquitlam’s white-hot industrial demand.
It has two speculative industrial buildings underway for lease at Fraser Mills and a third being custom-built for AG Hair, a Burnaby cosmetic maker that ships product around the world.
There has been a “ton of interest” for leasing the remaining 120,000 square feet, said leasing agent Greg Lane of Colliers International.
Beedie is considering only tenant applications that match a specific profile.
“We are taking our time,” Lane said. “We want to have job creation, such as clean manufacturing.”
The limited industrial space in Coquitlam has also spurred strata speculation. Teck Construction LLP sold out all 27 units of its spec play at Coquitlam’s Nicola Avenue Business Park this year before the shovels even hit the ground. The 68,700-square-foot complex opens this spring.
Strata industrial space in Coquitlam sells for around $280 per square foot.
Fraser Mills was once was a large, heavy-industrial site but residential will mostly swallow it up.
That’s worrisome, said Michael Hind, CEO of the Tri-Cities Chamber of Commerce. “We’ve exhausted all industrial land in Coquitlam.”
Hind said other than a 120-acre parcel of land in Port Coquitlam being developed by the Kwikwetlem First Nation there’s not much industrial land to be had anywhere in the Tri-Cities, which includes Coquitlam.
David Munro, Coquitlam’s economic development officer, agreed there’s a lack of industrial but he said the city is also creating opportunities for businesses fleeing even higher rental rates or property prices closer to Vancouver.
“Yes, we are losing businesses, but there’s other businesses that are coming in and taking up those spaces,” Munro said.
The Fraser Mills changes require adjustments to Coquitlam’s official community plan and zoning bylaws and public consultation, which would likely not finish until at least mid-year 2018, said James McIntyre, the city’s general manager for planning and development.

Copyright © 2017 Western Investor

Canadian housing starts increased 2 per cent in September to 222,771 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts also increased to 216,770  units SAAR.

New home construction in BC jumped 44 per cent on a monthly basis to 53,751 units SAAR  and more than doubled on  a year-over-year basis.  Single detached starts were down 6 per cent from one year ago while multiple unit starts nearly tripled year-over-year.

Looking at census metropolitan areas (CMA) in BC:

  • Total starts in the Vancouver CMA reached a 12-month high in October, rising 92 per cent from September and 186 per cent compared to September 2016. A surge in multiple unit starts to 2,532 units in October accounted for the large increase in new home construction with large condominium projects getting underway in Burnaby, Coquitlam and Surrey.
  • In the Victoria CMA market, housing starts continue to record significant gains, rising 267 per cent year-over-year. Multiple unit starts continue to drive new home construction, with starts more than 5 times the levels seen in October 2016.
  • New home construction in the Kelowna CMA was down 16 per cent year-over-year and down 61 per cent from a strong September of new home construction.
  • Housing starts in the Abbotsford-Mission CMA also fell in October, with both single and multiple units starts down more than 30 per cent year-over-year.

The Bank of Canada announced this morning that it is maintaining its target for the overnight rate at 1 per cent. In the press release accompanying the decision, the Bank noted that inflation has edged up slightly and is expected to return to its target of 2 per cent in the second half of 2018 while economic growth is forecast to slow in the final six months of this year following a very strong first half.  The Bank emphasized that it will be cautious in making future adjustments to its policy rate as it assesses the sensitivity of the economy to higher interest rates.

There are several factors influencing the Bank’s decision to move to the sidelines. Recent economic data points to a slowing of growth from the soaring heights of the first half of 2017. Moreover, inflation remains muted and newly announced tightening of mortgage regulations will have a significant impact on households, particularly in a rising mortgage rate environment. We expect that the Bank will take a wait and see approach over the next few months as the impact of its previous rate tightening takes hold.

Canadian manufacturing sales rebounded 1.6 per cent in August following two consecutive months of falling output.  Sales were up in only 8 of 21 manufacturing sub-sectors, with the majority of growth arising due to higher sales in the transportation equipment and energy sectors.

In BC, manufacturing sales increased 0.8 per cent on a monthly basis and were up 5.2 per cent year-over-year. Strong gains continued in the wood products sector, along with very strong growth in machinery, and transportation equipment manufacturing. A growing manufacturing base has helped push employment higher across the province, supporting housing demand making strong contributions to BC’s economy in 2017

Vancouver, BC – October 12, 2017. The . The British Columbia Real Estate Association (BCREA) reports that a total of 8,340 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in September, an increase of 9.9 per cent from the same period last year. Total sales dollar volume was $5.8 billion, up 30.2 per cent from September 2016. The average MLS® residential price in the province was $693,774, up 18.5 per cent from September 2016.

“BC home sales rose nearly 5 per cent from August on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “Total active listings on the market continue to trend at ten-year lows in most BC regions, limiting unit sales and pushing home prices higher. While the economic fundamentals support elevated housing demand, rising home prices are eroding affordability, particularly for first-time buyers.”

Year-to-date, BC residential sales dollar volume was down 12.8 per cent to $57.6 billion, when compared with the same period in 2016. Residential unit sales declined 13 per cent to 81,608 units, while the average MLS® residential price was down 0.2 per cent to $705,501.

Canadian housing starts decreased by 4 per cent in September to 217,118 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts also declined to 214,821 units SAAR.
New home construction in BC rose 6 per cent on a monthly basis to 37,470 units SAAR but was down 18 per cent on a year-over-year basis.  Single detached starts were flat compared to one year ago while multiple unit starts declined 24 per cent year-over-year.
Looking at census metropolitan areas (CMA) in BC:
Total starts in the Vancouver CMA fell 13 per cent from August and were down about half compared to September 2016. Multiple unit starts were down 58 per cent from one year ago as record levels of units under construction weigh on new projects.
In the Victoria CMA market, housing starts continue to surge, rising 127 per cent year-over-year. Multiple unit starts continue to drive new home construction, with starts more than triple levels seen last September.
New home construction in the Kelowna CMA jumped more than 200 per cent year-over-year as close to 350 new multiple unit starts were recorded.
Housing starts in the Abbotsford-Mission CMA also more than doubled year-over-year due to strong growth in both single and multiple starts.

BCREA ECONOMICS NOW
Canadian Inflation and Retail Sales – September 22, 2017
Canadian inflation, as measured by the Consumer Price Index (CPI), registered 1.4 per cent in the 12 months to August. That is a slight uptick from 1.2 per cent in July.   The Bank of Canada’s three measures of trend inflation were also up slightly, averaging 1.5 per cent.   In BC, provincial consumer price inflation was 2.0 per cent in the 12 months to August. 
Canadian retail sales increased 0.4 per cent on a monthly basis in July and were 7.8 per cent higher year-over-year. Sales were higher in 6 of 11 retail sub-sectors with the main contribution coming from motor vehicle dealers and food and beverage stores. In BC, vigorous consumer spending continues to set the pace for the BC economy. Retail sales in the province climbed 0.7 per cent on a monthly basis and were up 12.3 per cent year-over-year.
Despite rapid economic growth in Canada, there is still very little sign of inflation. With inflation reading well below the Bank of Canada’s 2 per cent target once again in August, the case for a further rate increase in October is lessened though not completely closed.

Commercial real estate activity in the Lower Mainland declined from the record highs of one year ago and returned to more historically typical levels in the second quarter (Q2) of 2017.

There were 595 commercial real estate sales in the Lower Mainland in Q2 2017, a 32 per cent decrease from the record 875 sales in Q2 2016, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

The total dollar value of commercial real estate sales in the Lower Mainland was $2.886 billion in Q2 2017, a 37.5 per cent decrease from $4.615 billion in Q2 2016.

“Land and industrial sales experienced the largest year-over-year declines last quarter, with sales in both categories down more than one-third compared to 2016,” said Jill Oudil, REBGV president. “Looking back over several years, however, we see that last quarter’s sale and dollar value activity follow more historically normal trend lines.”

Q2 2017 activity by category

Land: There were 227 commercial land sales in Q2 2017, which is a 39.3 per cent decrease from the 374 land sales in Q2 2016. The dollar value of land sales was $1.510 billion in Q2 2017, a 28.6 per cent decrease from $2.116 billion in Q2 2016.

Office and Retail: There were 218 office and retail sales in the Lower Mainland in Q2 2017, which is down 23.2 per cent from the 284 sales in Q2 2016. The dollar value of office and retail sales was $0.775 billion in Q2 2017, a 57.7 per cent decrease from $1.835 billion in Q2 2016.

Industrial: There were 114 industrial land sales in the Lower Mainland in Q2 2017, which is down 34.9 per cent over the 175 sales in Q2 2016. The dollar value of industrial sales was $0.243 billion in Q2 2017, a 13.3 per cent decrease from $0.280 billion in Q2 2016.

Multi-Family: There were 36 multi-family land sales in the Lower Mainland in Q2 2017, which is down 14.3 per cent over the 42 sales in Q2 2016. The dollar value of multi-family sales was $0.358 billion in Q2 2017, a 6.8 per cent decrease from $0.384 billion in Q2 2016.

Click here to download the full Q2 2017 commercial stats package.