Housing sales highest since ’89

Residential property sales in Greater Vancouver sizzled in 2003, establishing a new record for the total number of units sold, while average prices also hit all-time highs.

Year-end Multiple Listing Service figures released Monday show 37,901 detached houses, townhomes and condominiums sold over the entire year in the region, up 11 per cent from 33,864 units in 2002.

The previous highest annual total was in 1989, when 36,415 homes totalling $7.043 billion changed hands.

The dollar volume of properties sold last year exceeded $12.5 billion, 22 per cent more than $10.25 billion the previous year.

“This [sales] activity was a continuation of a strong 2002 market, but was further fuelled by confidence in the economy, heightened interest in real estate as an investment, and excitement during a year in which we won the Olympic bid,” said Bill Binnie, president of the Real Estate Board of Greater Vancouver.

“Month after month, we continued to see historically low interest rates combine with pent-up demand to fan an already healthy housing market.”

Purchasers fighting over desirable properties and locations engaged in bidding wars throughout 2003, as inventory continued dwindling. At year- end, there were 6,902 active listings in Greater Vancouver, down 15 per cent from 8,193 units the year before.

Many top realtors reported experiencing their best years ever.

One five-bedroom character house in Dunbar, at 3490 West King Edward, changed hands twice in 2003. In January, it sold for $548,000, then resold in November, following some renovation, for $709,000.

“This has been an absolutely incredible year both for the number of sales and price increases of at least 15 per cent across the board over last year,” said Vancouver realtor Faith Wilson, the listing agent for the Dunbar house.

“Competition has been intense, with … buyers having to put up with multiple offers all year.”

In 2002, Wilson, of Re/Max Real Estate Services, sold $8 million worth of homes. For 2003, she expects to more than double her dollar volume to $18 million.

Condos were by far the hottest ticket last year, as 14,843 units sold on the MLS, up 24 per cent from 11,967 units in 2002. Although the region’s year-end average condo price only reached $216,900 — up nine per cent from $197,700 — some condos in hot downtown locations resold at staggering profits for their vendors.

For example:

– At Concord Pacific’s waterfront Quaywest Resort condo tower at 1033 Marinaside Cres., a two-bedroom-and-den unit purchased in February 2002 for $291,500 sold in November 2003 for $485,000 — a 66-per-cent increase.

– At Concord’s West One building, near Homer and Pacific, a 1,057-square-foot 19th-floor condo originally purchased in March 2001 for about $330,000, was flipped in August 2002 for $394,200.

Last month, a new buyer paid $538,000 for the two-bedroom-and-den unit.

– At 1199 Marinaside Cres., near the Urban Fare supermarket, a 22nd-floor 1,062-square-foot unit, purchased in December 2000 for $326,250, sold in October 2003 for $443,000.

With condo sales at a fever pitch, developers now find it next to impossible to keep up with consumer demand.

Between May and June, it took developer Peter Wall only 11 weeks to sell out all 456 units at his Electric Avenue condo project in the 900-block Hornby, $104 million worth.

In August and September, it took him five weeks to sell all 423 units at the Hudson, at Granville and Dunsmuir, raking in $101 million.

Over the next several years, Wall plans to develop a total of 850 new condo units in three residential towers, called Yaletown Park, at Mainland and Homer. While marketing for the first 300 units won’t start until next month, Wall already has more than 200 people on a waiting list.

Driven by this seemingly insatiable consumer demand for condos amid a shrinking land bank, developers are now willing to pay in excess of $100 per buildable square foot for building sites — double the prices from only a couple of years ago.

Among detached houses, the average year-end price in Greater Vancouver was $449,300, up 14 per cent from $394,500 at the end of 2002.

On Vancouver‘s west side, the year-end detached price hit $787,100, compared to $698,500 the previous year, a 12.7-per-cent increase.

In West Vancouver, the year-end detached average was $908,900, up 17.4 per cent from $773,900.

Of the 10 most expensive homes sold in Greater Vancouver on the MLS in 2003 — ranging in price from $3.35 million to $6.1 million — six were located in West Vancouver and four in Vancouver’s west side or Coal Harbour.

In the six Fraser Valley communities, a total of 18,351 homes sold last year, up 13.9 per cent from 16,106 sales in 2002.

On a percentage increase basis in year-over-year sales, the hottest housing markets in 2003 were found in Vancouver’s west side, up 25.4 per cent; Squamish, up 21.6 per cent; Surrey, up 16.43 per cent; Langley, up 14.8 per cent; and New Westminster, up 14 per cent.

Despite rising property prices, it is cheaper now to own a home in most areas of Canada — including Vancouver — than it was 14 years ago, according to a recent Re/Max report.

The survey found that in 20 of the country’s 28 major residential real estate markets tracked back to 1989, the 2003 monthly mortgage payment, or carrying cost, has declined by up to 38.5 per cent.

In Greater Vancouver, where the average MLS price of a home at the end of October was $326,000 — the highest in Canada — the monthly payment was $1,783, compared to $1,996 in 1989, a drop of 10.7 per cent.

The monthly housing cost is based on a property purchase price of $326,173, with a 10-per-cent downpayment of $32,600, and a five-year fixed mortgage at 5.25 per cent, amortized over 25 years.

Under this scenario, the total annual family income required to service such a home in Greater Vancouver is $66,863.

By comparison, in 1989, when the average residential price was $209,671, the interest rate for a five-year term was 12 per cent, meaning that the family income required to become a home owner was $74,850 per annum –nearly $8,000 more than in 2003.

Re/Max said lower costs, alternate housing forms and creative financing all contributed to helping Canadians enter the housing market en masse this year.

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PROPERTY-VALUE CHANGES

Some indicators of property-value changes in Greater Vancouver:

– A mid-1940s house on a 33-foot lot in East Vancouver sold for $250,000 in July 2002, and for $268,000 one year later.

– A 10-year-old west-side Vancouver home sold for $700,000 in August 2002, and again for $731,000 in June 2003.

– Nine-year-old one-bedroom concrete condo unit in East Vancouver sold for $82,000 in 2002, for $90,000 a year later.

– Single-family home in Dundarave, West Vancouver, sold for $695,000 in August 2002, resold for $788,500 in June 2003.

– In Port Coquitlam, a single-family home built in the 1960s sold for $255,000 in 2002, and $290,000 a year later.

– 1990s South Burnaby home valued at $590,000 in summer 2002 was worth $630,000 a year later.

– Three-bedroom townhouse in New Westminster was valued at $215,000 in 2002, and $262,000 in 2003.

– 30-year-old single-family home in Richmond‘s Steveston area sold for $385,000 in 2002, and for $412,000 a year later.

Source: B.C. Assessment Authority

CHECK YOUR NEIGHBOUR’S ASSESSMENT

Yes, you can use the Internet to check your neighbour’s assessed property value, or your cousin’s, or a celebrity of your choice.

All you need is the address of the property, and for the B.C. Assessment Authority’s “assessments by address online” service to be working.

It wasn’t working Monday, but authority officials said it should be operating again this morning. The authority encourages members of the public to check other people’s property assessments, because it helps them understand how the assessment system operates.

When it’s working, the service can be reached from the authority’s main Web site at http://bcassessment.gov.bc.ca/index.html.

FAST-RISING VALUE CAN MEAN LOWER TAX RATE

A large increase in property value does not mean your property taxes will rise proportionally.

In fact, fast-rising property values often mean lower tax rates.

That’s because municipal governments typically approve operating budgets a few percentage points larger than the previous year’s budget.

If property values rise more than that, a municipality can actually reduce its local property tax rate while still collecting more money from property owners.

Using the same tax rate on inflated property values would lead to absurd results, explained David Highfield, the B.C. Assessment Authority’s area assessor for Vancouver and the North Shore.

“Just because assessment has doubled, you don’t want twice as many fire halls,” Highfield explained.

© Copyright 2004 Vancouver Sun