Recent stats are showing a rebound in housing prices in the Lower Mainland that took a bit of a hit after Vancouver’s foreign buyer tax came into effect. The rise in prices is lead by the region’s active condo market, according to The Real Estate Board of Vancouver. Meanwhile, Victoria’s mayor is considering imposing the foreign buyer tax in the hopes of cooling prices in the city. However, real estate professionals believe it is local competition – not foreign capital – that is driving up prices.
In the commercial market, delayed projects in Squamish and Winnipeg garnered much attention on WesternInvestor.com – though for different reasons.
Without further ado, here’s the skinny on Western Canada’s top real estate market stories.
Vancouver housing market is rebounding from tax impact, with prices up 5% in three months – Financial Post
According to new REBGV numbers, sales activity has slowed from March to April, though composite benchmark prices have risen 5 per cent in the past three months and 11.4 per cent over a year ago. The Financial Post spoke to REBGV to discover the underlying success story of this month’s report – the region’s condo and townhouse market.
“Our overall market is operating below the record-setting pace from a year ago and is in line with historical spring levels. It’s a different story in our condominium and townhome markets,” said Jill Oudil, president of the board. “Demand has been increasing for months and supply is not keeping pace. This dynamic is causing prices to increase and making multiple offer scenarios the norm.”
The board said for the first four months of the year, condominiums and townhomes accounted for 68.5 per cent of all residential sales, up from the 58.2 per cent average over the same period last year.
“Until more entry level, or missing middle, homes are available for sale in our market, we’ll likely continue to see prices increase,” Oudil said. “There’s been record building this past year, but much of that inventory isn’t ready to hit the market.”
The Vancouver market has seen sales decline steadily since the province announced an additional 15 per cent tax on foreign buyers effective Aug. 2, 2016. Ontario followed with its own 15 per cent on foreign buyers, calling it a non-resident tax and extending it to the entire Greater Golden Horseshoe which affects a population of about nine million people in southern Ontario.
Doug Porter, the chief economist with Bank of Montreal, said the evidence is clear that the tax in British Columbia did cool Vancouver’s single detached home market. “Vancouver was as hot as a fire cracker in 2016,” said Porter. “It looks the shock of the tax is wearing off. But who knows where prices would have been absent the tax?”
April new listings for detached, attached and apartment properties in Metro Vancouver totalled 4,907, a 19.9 per cent decrease from a year ago but a three per cent increase from March.
‘Bully bids,’ shortage push Victoria home prices higher – Business in Vancouver
Western Investor editor Frank O’Brien explored just what is driving rising prices in Victoria real estate for Business in Vancouver. O’Brien found that although listings have dropped off in B.C.’s capital city, prices have continued to increase.
It is not foreign buyers but “bully bids” from frustrated locals competing for a record-low inventory that are driving Victoria home prices higher, according to real estate agents and analysts.
“Foreign buyers probably make up less than 5% of the housing market here,” said Royal LePage Victoria broker Bill Ethier.
He added that most out-of-town buyers are from Metro Vancouver or other parts of the B.C. mainland. Last week, Victoria Mayor Lisa Helps said the city will ask the province to slap a 15% tax on housing purchased by non-resident foreign nationals, similar to the tax introduced in Metro Vancouver last August, if the number of foreign buyers reaches 10% of Victoria housing sales. But Ethier and other agents say a shortage of homes for sale has caused aggressive bidding that has driven prices higher as home sales fall.
The number of real estate agents in Greater Victoria is nearly equal to the number of listings, according to the Victoria Real Estate Board.
“We are seeing an increase in bully bids,” said Re/Max Victoria agent Ray Blender, referring to homebuyers presenting offers far above the asking price on some properties. “I have seen buyers bidding $80,000, even $150,000 above asking [price].”
Neither Re/Max’s 2017 spring market trends report nor the Canada Mortgage and Housing Corp.’s most recent Housing Market Assessment on the Victoria market mentions foreign buyers as being a factor in the city’s high housing prices.
Chinese developer gains foothold for delayed Squamish project – Western Investor
Foreign investment in B.C. has stretched beyond Vancouver city limits. Taicheng Development Corp. has plans for about 1,000 homes on 178-acre Sea-to-Sky Highway site north of Vancouver, but they’ve faced ongoing delays since they purchased the site five years ago.
Land for the project had been purchased in 2012 and development applications have been submitted.
However, it will still be some time before shovels hit the ground, as the district has not yet approved the plans.
“They have a long, long way to go,” Rainbow said.
The latest proposal for the project would have about 1,000 homes constructed on 178 acres of land.
It’s expected to include a mix of houses, townhouses, row houses and apartments. Options to include laneway housing are expected to be available for houses on single-family lots.
Developers are hoping to have a central park and commercial space that could accommodate a coffee shop, pub and restaurant, among other things.
Included in the property is the gravel pit south of the mining museum, the former Makin lands and some of the land leading to the top of Furry Creek.
While proponents think its proximity to Vancouver would make it ideal for young commuting families – and recreational users – local critics have voiced concerns about the traffic that it might cause.
SkyCity Centre condos stalled on pre-sales – Western Investor
Winnipeg developers are still finalizing plans for the new SkyCity tower, as pre-sales for condo units have been less than outstanding to justify financing to complete plans.
Winnipeg developers planning to build a 45-storey, $200 million condominium/commercial tower – to be called SkyCity Centre – have been given a 12-month extension to finalize their plans.
Angela Mathieson, president and CEO of CentreVenture Development Corp., said Fortress Real Developments Inc. and Edenshaw Developments Ltd. have until April 30, 2018, to demolish the St. Regis Hotel on Smith Street and begin constructing the new complex.
Bank financing required the developers to pre-sell 60 per cent of the units, and thus far, only 50 per cent have been sold.
“[Buying a pre-sale] is a newer phenomenon in Winnipeg and there is some reluctance for people to buy them. It’s taking some time. They are marketing them like crazy but they have a ways to go,” Mathieson said.
