Mortgage Rate Forecast

September 17th, 2014

Lower, but for how muchlonger?

BCREA
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Chinese developer Greenland makes its first purchase in Canada – a Toronto condo project

September 17th, 2014

Katia Dmitrieva
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Greenland Holding Group Co., a Shanghai-based developer owned by the Chinese government, said it bought King Blue, a two-tower condominium project in Toronto, its first purchase in Canada.

Greenland Holding bought the planned development, which includes 44 and 48-story towers, from closely held Easton’s Group of Hotels Inc. and The Remington Group Inc. for at least $100 million, according to Easton’s Chief Executive Officer Steve Gupta.

Immigration is a main factor driving demand, Gupta, the India-born founder of Toronto-based Easton’s, said by phone today.
Greenland Holding, which has invested in London’s Canary Wharf and New York’s Pacific Park, said it bought the site as an entry-point to Canada’s housing market where existing home sales reached a four-year high in August. Average Toronto condominium prices rose 5.5% to $367,010 in the second quarter over a year ago and sales advanced 10%.

“We believe this city will continue to grow and thrive creating other investment opportunities for Greenland Group (Canada) in the Greater Toronto Area and beyond,” Greenland Holding Chairman Yuliang Zhang said in the statement.

The King Blue project, which includes a former Westinghouse factory built in 1927, is located on King Street West, amid newly-opened bars and the TIFF Bell Lightbox Theatre which hosts the annual film festival. The 44-storey tower is 85% sold, according to Gupta. The second tower, hasn’t been pre-leased yet.

© 2014 National Post

In Vancouver, rich homeowners get richer – The median price for detached homes was $1,069,000 on July 1, 2013

September 17th, 2014

Brent Jang
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The price of admission to enter an elite club in Vancouver is going through the roof. To make the top 1 per cent in the city’s market for single-family detached houses, a property needs to be assessed at more than $5.58-million.

Vancouver is well known for its pricey real estate. The median price for detached homes was $1,069,000 on July 1, 2013, based on assessed values for houses within the City of Vancouver.

Andrew Yan, an urban planner with Bing Thom Architects, crunched the numbers supplied by BC Assessment, the provincial Crown corporation that provides valuations on behalf of B.C. municipalities, and found the rich are getting richer, at least for their abode.

He found that to claim bragging rights to be a member of the 1-per-cent club, a Vancouver property needs to be valued at $5,586,000 or higher. The most expensive homes, he found, have enjoyed the highest increases in assessed value over a five-year period. Comparing assessments conducted in 2013 with those in 2008, the value of homes in the 1-per-cent bracket has soared an average of 65.4 per cent from $3,377,000 in 2008.

Prices have jumped sharply for luxury homes due to increased demand from well-heeled buyers from other provinces and abroad, combined with a relatively limited number of listings for detached properties in a city where developers are increasingly focused on building condos and townhouses. Over the past three years, prices have been flat for condos and townhouses in Greater Vancouver, including the suburbs.

But within the City of Vancouver, detached homes assessed last year at $3,278,000 or higher qualify for being among the top 5 per cent, up 63.8 per cent from the threshold of $2,001,000 in 2008.

Getting to the upper crust’s top 10 per cent means having a home valued at $2,601,000 or higher, up 60.4 per cent from $1,621,900 in 2008. To make it into the top-33rd percentile out of a total of about 67,800 detached houses, a homeowner needs to have a property valuation of at least $1,484,000. Assessed values in the top-33rd percentile climbed an average of 46 per cent during the five-year period.

A Globe and Mail review of the data reveals that Lululemon Athletica Inc. founder Chip Wilson’s waterfront mansion is No. 1 on the latest assessment list, topping the B.C. charts at $54.2-million. In the previous assessment, as the home was being built, the value was $35.2-million

The next three highest assessed values are all homes located along Belmont Avenue in the upscale Point Grey neighbourhood on Vancouver’s west side.

A property registered to Pisonii (PTC) Ltd. is the runner-up at $46-million in the 2013 assessment, followed by the $28.6-million residence of philanthropist Nezhat Khosrowshahi and her husband, Future Shop founder Hassan Khosrowshahi. He is chairman of Persis Holdings Ltd. and serves on the board of the Bank of Canada. Fourth overall is the $25.6-million property owned by real estate developer Joseph Segal and his wife Rosalie, a philanthropist.

Other prominent owners include Vancouver entrepreneur Jacqueline Cohen, whose waterfront home in the Kitsilano neighbourhood is assessed at $24.2-million – enough to place No. 9 in the list of B.C.’s highest valued residential properties.

Mr. Yan’s data shows 4,360 detached properties were valued at $3-million or higher in his latest compilation. But owning a million-dollar home in Vancouver is increasingly run-of-the-mill, statistically speaking. He notes that 37,425 homes, or 55.2 per cent of the total detached properties on the assessment rolls, were pegged as being worth at least $1-million in mid-2013, up from 22,908 or 33.8 per cent in mid-2008.

Many first-time buyers look at townhouses and condos when entering the local market. Last month’s home price index for Greater Vancouver townhouses reached $474,900, up 3.9 per cent from a year earlier, while condo prices have climbed 3.6 per cent to $379,200 over the past year.

Copyright 2014 The Globe and Mail Inc.

Orizon on Third 221 3rd Street north Vancouver 104 condos in a 5 storey building by Intracorp

September 16th, 2014

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The Black + White at Foster and Aspen in Coquitlam 107 townhouses by Intracorp

September 16th, 2014

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Financial and less tangible benefits of townhome living

September 16th, 2014

Tony Kaleel
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Chinese millionaires plan to leave China – Seventy-three percent said they were looking for “economic security” and 72 percent said they wanted a “desirable climate.” Their top destinations are Hong Kong, Canada and the U.S.

September 16th, 2014

Robert Frank
Other

Nearly half of Chinese millionaires plan to move out of the country in the next five years – a flight that could add to worries over the country’s economy, as more money moves offshore rather than being invested or spent in China.

According to a study from Barclays and Ledbury Research, which polled more than 2,000 people worth $1.5 million or more from 17 countries, 47 percent of Chinese millionaires plan to emigrate, while another 20 percent said they don’t know if they will move.

That’s the highest rate of planned millionaire flight in the world, topping Qatar at 36 percent and Latin America at 34 percent.

The study supports a finding from Hurun Report earlier this year, which said 64 percent of Chinese millionaires have either emigrated or plan to emigrate.

When asked why they are leaving China, 78 percent of respondents in the Barclays and Ledbury study said they were seeking “better educational/employment opportunities” for their kids. Seventy-three percent said they were looking for “economic security” and 72 percent said they wanted a “desirable climate.” Their top destinations are Hong Kong, Canada and the U.S.

Countries are now competing fiercely to attract today’s roving rich. While London, New York and Singapore have become global “hot spots,” countries in Europe and the Caribbean have also opened up special visa programs for rich investors.

“There has been an explosion in second passports as a way for these high net worth individuals to achieve global mobility,” Nicolas Rollason, head of business immigration at London-based law firm Kingsley Napley, said in the report. “If you look at the Russian and Chinese high net worth communities, having second passports and a residence that gives you access to a number of countries visa-free, it is very much seen as a badge of honor.”

The Chinese rich aren’t the only ones leaving. The study found that nearly half of today’s global millionaires have lived in more than one country – and many more are planning to migrate in the next five years.

Most millionaire Americans who plan to migrate are going to Europe, the study found. The largest number of millionaires planning to leave Asia are bound for North America, while millionaire migrants from the Middle East are basically split between Europe and North America.

© 2014 CNBC LLC.

Canadian manufacturing sales increased 2.5 per cen – BCREA

September 16th, 2014

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Canadian manufacturing sales increased 2.5 per cent in July to $53.7 billion, surpassing the previous record monthly dollar volume set in July 2008. Sales were higher in 16 of 21 manufacturing sub-sectors.

In BC, manufacturing sales were up 0.2 cent on a monthly basis, and were 10.4 per cent higher year-over-year. Through the first seven months of the year, manufacturing sales are 6.3 per cent higher than last year. The durable goods sector, which includes wood products, mineral products and machinery and equipment manufacturing, has bounced back from a slow start, growing 2.8 per cent year-to-date. Non-durable goods like paper, clothing, and food manufacturing, have posted 10.6 per cent growth compared to 2013.

The manufacturing sector is one of the largest employers in British Columbia. Growth in sales should help drive employment and household income gains in markets with a large manufacturing base, which in turn will ensure a strong local housing markets.

Copyright ©2014 BCREA

Home prices up, blame it on Toronto, Vancouver and Calgary

September 15th, 2014

Garry Marr
Other

Three of the country’s most expensive housing markets continue to drive the national average price for a home, according to a new report.

The Canadian Real Estate Association said Monday the average sale price of a home in August reached $398,618, a 5.3% increase from a year ago.

“Although activity rose in fewer than half of local housing markets in August, the national tally was fuelled by monthly increases in Greater Vancouver, Calgary and Greater Toronto,” the Ottawa based group said in a release.

The big three continue to see prices rise while their sales continue to increase, both factors helping to drive national numbers. Year-to-date, Vancouver sales are up 18% year over year while Toronto and Calgary are up 4.2% and 13.% respectively.

Added together, the three cities are responsible for 33% of all sales in the country this year. However, the dollar value of the trades year-to-date have so far been worth about 48% of all activity.

“Sales picked up in some of Canada’s most active and expensive real estate markets which fuelled another national increase,” said Beth Crosbie, president of CREA, in the release. “Even so, the national increase in sales does not reflect local trends in many markets across the country.”

Prices were down in August from a year ago in six of the markets surveyed. Another eight markets were near the rate of inflation, in terms of price increases.

For August, national sales were up 1.8% from July and 2.1% from a year ago. It was the seventh consecutive month sales have grown and the highest level for sale since January, 2010.

“Sale activity in recent months has remained stronger than was anticipated earlier this year,” said Gregory Klump, chief economist with CREA, in a statement. “Listings and sales this spring were deferred due to unseasonably harsh weather which subsequently supported activity once the delayed spring home buying season got into gear. This trend was reinforced by a decline in mortgage interest rates.”

Mr. Klump said the boost from deferred sales will not continue and noted sales were down from the previous month in a majority of Canadian markets.

Supply continues to be constrained led by Toronto where new listed homes were down 1.2% in August from July. New listings were down from a month ago in about 60% of the markets surveyed by CREA.

© 2014 National Post

Outside of Toronto, Vancouver and Calgary, Canada’s housing market is ‘mediocre at best’

September 15th, 2014

Garry Marr
Other

The national average home price shows a market still growing but increasingly that figure is hiding the fact that it’s barely treading water in many Canadian cities.

Toronto, Calgary and Vancouver continue to drive the Canadian housing market, but there is little the federal government can do to cool them off without impacting the rest of the country, say economists.

“We have very strong markets in three of our biggest cities and almost the rest of the country is mediocre at best,” said Doug Porter, chief economist with Bank of Montreal. “Some of these cities, by some measures, are quite weak.”

The Canadian Real Estate Association said Monday the average sale price of a home in August reached $398,618, a 5.3% increase from a year ago.

Vancouver August sales were up 18% year over year while Toronto and Calgary were up 4.2% and 13.6% respectively. Added together, the three cities are responsible for 33% of all sales in the country this year. However, the dollar value of the trades year-to-date have so far been worth about 48% of all activity.

Mr. Porter noted the deepening divide happening across the country. “On the sales side, almost half the major markets reported declines last month,” he wrote.

The federal government, which has moved four times to tighten regulations in a effort to slow down the housing market, might be hard-pressed to do so again given the market differences.

“I’m not sure [any] markets are so hot they need dousing,” said the economist. “If you hit the market with something like tighter mortgage rules, that could send some already weak markets into a tailspin. Policy makers are in a tough bind.”

Ottawa-based CREA made special note in its monthly release about how the big three real estate markets were driving the overall number.

“Sales picked up in some of Canada’s most active and expensive real estate markets, which fuelled another national increase,” said Beth Crosbie, president of CREA. “Even so, the national increase in sales does not reflect local trends in many markets across the country.”

Prices were down in August from a year ago in six of the markets surveyed. Another eight markets were near the rate of inflation, in terms of price increases.

For August, national sales were up 1.8% from July. It was the seventh consecutive month sales have grown and the highest level for sales since January, 2010.

Finn Poschmann, vice-president of research with the C.D. Howe Institute, noted that though Toronto, Vancouver and Calgary are dominating the data to produce increasing values, it hasn’t always been that way.

“If you look back over five years, things are a little different. Calgary had the biggest hit over 2008-09, and spent late 2010 through summer 2011 in negative territory as well. Vancouver went through a cooling phase from summer 2012 through summer 2013. The GTA though is the relentless monster – prices marched steadily since September 2009, with a five-year annual growth rate of 7.5%. That adds up fast,” said Mr. Poschmann, who thinks the eventual interest rate rise on the horizon should produce “some cooling” in the coming year..

He says Ottawa could control individual markets if Canada Mortgage and Housing Corp. introduced risk pricing into its mortgage insurance model. That would raise costs in those markets.

“Governments absolutely should not target specific markets. It is implausible that Ottawa could be the better judge of a sustainable market, or at what prices the market should clear,” he said.

Ottawa may not have to intervene based on the view of CREA’s chief economist who says some of the increased activity is a bit of a one-time blip.

“Sale activity in recent months has remained stronger than was anticipated earlier this year,” said Gregory Klump, chief economist with CREA. “Listings and sales this spring were deferred due to unseasonably harsh weather which subsequently supported activity once the delayed spring home buying season got into gear. This trend was reinforced by a decline in mortgage interest rates.”

© 2014 National Post