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Commercial real estate sales decline and price activity varies across the Lower Mainland

Commercial real estate sales in the Lower Mainland declined in the third quarter (Q3) of 2018 compared to the elevated activity experienced in recent years.

There were 565 commercial real estate sales in the Lower Mainland in Q3 2018, a 19.5 per cent decrease from 702 sales in Q3 2017, 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 reached $3.903 billion in Q3 2018, a 0.9 per cent decrease from $3.938 billion in Q3 2017.

“We’re seeing less demand across our commercial market compared to recent years and supply is beginning to ramp up with a number of projects expected to complete in our region over the next year,” said Phil Moore, REBGV president.

Q3 2018 activity by category

Land: There were 199 commercial land sales in Q3 2018, which is a 34.8 per cent decrease from the 305 land sales in Q3 2017. The dollar value of land sales was $2.007 billion in Q3 2018, a 14.8 per cent decrease from $2.356 billion in Q3 2017.

Office and Retail: There were 229 office and retail sales in the Lower Mainland in Q3 2018, which is down 4.2 per cent from the 239 sales in Q3 2017. The dollar value of office and retail sales was $1.377 billion in Q3 2018, a 45.5 per cent increase from $946 million in Q3 2017.

Industrial: There were 118 industrial land sales in the Lower Mainland in Q3 2018, which is down 12.6 per cent from the 135 sales in Q3 2017. The dollar value of industrial sales was $290 million in Q3 2018, a 30.1 per cent decrease from $414 million in Q3 2017.

Multi-Family: There were 19 multi-family land sales in the Lower Mainland in Q3 2018, which is down 17.4 per cent from 23 sales in Q3 2017. The dollar value of multi-family sales was $230 million in Q3 2018, a 3.9 per cent increase from $221 million in Q3 2017.

The above are reported by the Real Estate Board of Greater Vancouver on December 7, 2018. Contact Eva Li for real estate related questions or report. Let Eva’s expertise work for you.

Home listings at four-year October high as sales remain below typical levels

Home sale activity across Metro Vancouver* remained below long-term historical averages in October.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,966 in October 2018, a 34.9 per cent decrease from the 3,022 sales recorded in October 2017, and a 23.3 per cent increase compared to September 2018 when 1,595 homes sold.

Last month’s sales were 26.8 per cent below the 10-year October sales average.

“The supply of homes for sale today is beginning to return to levels that we haven’t seen in our market in about four years,” Phil Moore, REBGV president said. “For home buyers, this means you have more selection to choose from. For sellers, it means your home may face more competition, from other listings, in the marketplace.”

There were 4,873 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2018. This represents a 7.4 per cent increase compared to the 4,539 homes listed in October 2017 and a 7.7 per cent decrease compared to September 2018 when 5,279 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 12,984, a 42.1 per cent increase compared to October 2017 (9,137) and a 0.8 per cent decrease compared to September 2018 (13,084).

For all property types, the sales-to-active listings ratio for October 2018 is 15.1 per cent. By property type, the ratio is 10.3 per cent for detached homes, 17.3 per cent for townhomes, and 20.6 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Home prices have edged down between three and five per cent, depending on housing type, in our region since June,” said Moore. “This is providing a little relief for those looking to buy compared to the all-time highs we’ve experienced over the last year.”

The MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $1,062,100. This represents a one per cent increase over October 2017 and a 3.3 per cent decrease over the last three months.

Sales of detached homes in October 2018 reached 637, a 32.2 per cent decrease from the 940 detached sales recorded in October 2017. The benchmark price for detached properties is $1,524,000. This represents a 5.1 per cent decrease from October 2017 and a 3.9 per cent decrease over the last three months.

Sales of apartments reached 985 in October 2018, a 35.7 per cent decrease compared to the 1,532 sales in October 2017. The benchmark price of an apartment property is $683,500. This represents a 5.8 per cent increase from October 2017 and a 3.1 per cent decrease over the last three months.

Attached homes sales in October 2018 totalled 344, a 37.5 per cent decrease compared to the 550 sales in October 2017. The benchmark price of an attached home is $829,200. This represents a 4.4 per cent increase from October 2017 and a 2.8 per cent decrease over the last three months.

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Everything You Need to Know About Buying Your First Home

If you’re anything like me, you’re growing rather tired of spending the majority of your hard-earned pay each month on rent. You find yourself thinking that rent is expensive. Paying rent really does nothing to advance your own financials, so really, why bother? If this sounds like your train of thought lately than maybe you’re ready to buy your own home.

It sounds absolutely terrifying, I know. It certainly can be, especially if you lack the information and the “how to’s” of buying a home.

However, when you break it down, buying a home is not actually that scary or overwhelming. Just take it slow and know that you can’t move on to the next step before dealing with the one before.

Can you afford to purchase a home?

Take a good hard look at where you spend your money. Calculate all your bills and debts and see if adding mortgage payments to the mix would be doable for you. Your monthly housing costs shouldn’t be higher than 32% of your gross monthly income and your monthly debt load should be less than 40% of your gross monthly income.

There are even government initiatives that are set in place to encourage first-time buyers such as the First-Time Home Buyers’ Tax Credit. This credit, which works out to a rebate of $750 for all first-time buyers, will help with some of the extra costs of buying a home, including legal fees, disbursements, and land transfer taxes.

Even with this credit, first-time buyers must still save for a down payment. The minimum deposit required in Canada is at least 5% of the purchase price of the home. CMHC insurance is needed in order to protect the lender in case you default on your payments, but it can be avoided if you put down a down payment of 20% or more.

Qualifying and getting a mortgage

Getting a pre-approved mortgage is step two. It’s one of the best ways to determine what your shopping budget will be. Also, look for the best mortgage rates to get an idea of what rates are. A lender will analyze all of your finances and debts and determine how much money it could potentially allow you to borrow.

Before calling a lender, you should know some of these basics to help you feel more comfortable:

  • Lenders like consistency — they prefer loaning money to people who worked for at least two years
  • Explain every detail about all of your income to help your loan officer or mortgage broker give you the correct information
  • Have all of your financial documents at hand so you can give your loan officer or mortgage broker exact numbers
  • Be ready to have your credit checked, so be sure to close any open claims with collections before this is done; in fact, check your credit reports from either Equifax or TransUnion

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More supply and less demand seen across Metro Vancouver housing market

The supply of homes for sale continued to increase across the Metro Vancouver* housing market in September while home buyer demand remained below typical levels for this time of year.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 1,595 in September 2018, a 43.5 per cent decrease from the 2,821 sales recorded in September 2017, and a 17.3 per cent decrease compared to August 2018 when 1,929 homes sold.

Last month’s sales were 36.1 per cent below the 10-year September sales average.

“Fewer home sales are allowing listings to accumulate and prices to ease across the Metro Vancouver housing market,” Ashley Smith, REBGV president-elect said. “There’s more selection for home buyers to choose from today. Since spring, home listing totals have risen to levels we haven’t seen in our market in four years.”

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Metro Vancouver Housing Sales Down, Listings up

According to the July stats report provided by the Real Estate Board of Greater Vancouver (REBGV) on August 2, July’s residential housing sales in Metro Vancouver reached their lowest levels for that month since the year 2000.

REBGV reports that residential property sales in the region is 2,070 in July 2018, a 30.1 per cent decrease from the 2,960 sales recorded in July 2017, and a decrease of 14.6 per cent compared to June 2018 when 2,425 homes sold.

Last month’s sales were 29.3 per cent below the 10-year July sales average.

“With fewer buyers active in today’s market, we’re seeing less upward pressure on home prices across the region,” Phil Moore, REBGV president said. “This is most pronounced in the detached home market, but demand in the townhome and apartment markets is also relenting from the more frenetic pace experienced over the last few years.”

There were 4,770 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in July 2018. This represents a 9.2 per cent decrease compared to the 5,256 homes listed in July 2017 and a 9.6 per cent decrease compared to June 2018 when 5,279 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 12,137, a 32 per cent increase compared to July 2017 (9,194) and a 1.6 per cent increase compared to June 2018 (11,947).

For all property types, the sales-to-active listings ratio for July 2018 is 17.1 per cent. By property type, the ratio is 9.9 per cent for detached homes, 20.2 per cent for townhomes, and 27.3 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Summer is traditionally a quieter time of year in real estate. This is particularly true this year,” Moore said. “With increased mortgage rates and stricter lending requirements, buyers and sellers are opting to take a wait-and-see approach for the time being.”

Many listings have price reduction in order to increase showing activities.

If you would like to obtain a market trends report of a certain area, please feel free to contact Eva Li at 604 351 0789, email Eva@Evali.ca

What has driven home prices?

In Vancouver, almost 69 per cent of home buyers believe foreign investment is influencing the real estate market and driving up home prices, according to a new report from Canada Mortgage and Housing Corporation (CMHC).

For the report, Examining Escalating House Prices in Large Canadian Metropolitan Centres, CMHC surveyed 30,000 recent home buyers across Canada to find out more about home buyer perceptions.

“The survey allows us to better understand how home buying is influenced by attitudes and perceptions, giving rise to sustaining local narratives,” said Guillaume Neault, senior manager, analytics, CMHC.

Vancouver home buyers’ perceptions were in stark contrast to data released by Statistics Canada in late 2017.

This data found non-residents owned 4.9 per cent of properties in Vancouver. Of this percentage, seven to eight per cent were condominium apartments, while two to three per cent were single-detached homes.

The perception of foreign ownership influencing the market is not new.

In a 2015 Angus Reid Institute study of home buyer perceptions, 64 per cent of respondents believed foreigners investing in this real estate market is a main cause of high housing prices.

What is the reality?

There is always a demand and supply.  When the supply is low and the demand is high, the housing prices of course shall drive up.