Is it just me or is life starting to feel a little normal again?
From Kelowna to Kamloops to Vancouver to Victoria, the British Columbia real estate market has been on fire. But this is easy to accomplish when ostensibly the entire Canadian real estate market is trending at record highs. Sales activity is booming, prices have never been higher, supply is shrinking, and demand is fierce – both in the province and throughout the country. There are many factors to explain what is occurring throughout the Great White North.
But has the Canadian housing market reached its zenith? When focusing on specific areas of the country, this would be the definitive conclusion, particularly as new factors come into play.
The Kelowna real estate market is one of these Canadian housing sectors that seemingly peaked. But once you scratch beneath the surface, you learn that Kelowna and the broader Central Okanagan are going through a temporary slowdown after more than a year of meteoric growth. The term “slowdown” might be a bit of an overstatement, considering that prices are the highest they have ever been.
With fewer listings and strengthening demand, the developments in Kelowna continue to point a housing market on the up. What happened during the tail-end of the typically busy spring buying season? Let’s take a look at what the numbers highlight.
According to the Association of Interior Realtors, residential sales in the Kelowna real estate market, which is concentrated in Central Okanagan, tumbled 13.78 per cent month-over-month in May to 1,482 units.
On the pricing front, the benchmark selling price for a single-family home in Kelowna surged to an all-time high of $901,600 in May, up 2.45 per cent from April. A townhouse and condominium unit in Kelowna is going for $621,800 and $455,400, respectively.
While sales activity has eased, prices continue to climb. So, what is driving activity in this small but stong British Columbia real estate market? It all comes down to a common problem that is seen throughout the Canadian real estate market: limited supply.
Homebuyers are taking their time to purchase property, with the number of days to sell standing at 24. However, when assessing the annualised rate of inventory in May, prospects are fighting over shrinking housing stocks.
Listings have also leveled off from the same time a year ago, Okanagan Mainline Real Estate Board (OMREB) data show:
“What we can look at is what is currently happening and currently supply is still not catching up to demand. We are in a supply drought when it comes to listings,” said Association of Interior REALTORS® President Kim Heizmann in a news release.
“Despite the supply drought the market remains strong and is starting to rationalize,” she added. “With vaccine roll outs underway, once more and more people get vaccinated and we get some mobility and comfort back, hopefully we see more homes come on market.”
Could fresh supply be on the horizon for the Kelowna housing market? New properties are being constructed, but they slowed down in May. According to the Canada Mortgage and Housing Corporation (CMHC), housing starts rose by 95 in May, up from 156 at the same time a year ago. In the first five months of 2021, housing starts have totaled 816, up 767 from the previous year.
With prices at all-time highs and sales activity quieting down, does this mean the Kelowna real estate market has peaked? It might be easy to assume this is the case following last year’s buying frenzy following the first wave of the COVID-19 public health crisis. However, industry experts assert that this is a temporary slowdown, mainly because listings are still minimal and demand remains strong. Once the dust has settled and so-called buyer fatigue wanes, the Kelowna housing market is projected to experience liftoff once again.
Heizmann shared a perfectly apt analogy to describe the current situation in this local real estate market, telling Kelowna Now: “We are seeing an easing up on the gas pedal (of a car) that has been going above the speed limit, to now moving within a reasonable pace. There is a slight reduction in pressure that is creating a calming effect for a healthier market for both buyers and sellers.”
The Vatican owns more than 5,000 church and investment properties around the world, a central office at the Catholic Church revealed for the first time Saturday, according to several news outlets — but the church is struggling with a budget deficit, plus years of alleged mismanagement tied to its investment strategy.
Most of the Vatican’s real estate holdings (4,051) are in Italy, the majority of which are used by church-affiliated groups or rented out at reduced prices instead of getting leased at market rate, according to a report from the church-run Administration of the Patrimony of the Holy See (APSA) obtained by Reuters, Catholic News Service and other outlets.
APSA also reportedly holds over 1,000 properties in London, Geneva, Paris and other cities outside Italy, including a London real estate investment the Vatican controversially sank more than $400 million into nearly a decade ago.
Forbes has reached out to the Vatican for comment.
The Roman Curia — the Catholic Church’s central administrative body — ran a $76.3 million operating deficit in 2020, down from a $93.2 million deficit in 2019, according to a budget statement obtained Saturday by the Jesuit America magazine. In an interview with the church-run Vatican News, church official Father Juan Antonio Guerrero Alves called the Curia’s 2020 performance “better than what we expected,” partly because the church slashed expenses during the coronavirus pandemic. The church reported a larger overall deficit in 2020 than 2019, however, largely due to a drop in unrealized financial gains.
The Vatican’s financial practices — and particularly its real estate holdings — have drawn scandal and scrutiny for years. Pope Francis reorganized how the church’s real estate investments are overseen last year, following years of sometimes fraught attempts to reform the Curia amid claims of embezzlement and endemic financial mismanagement. Several people are on trial for allegedly scamming the church out of millions of dollars in connection with its London real estate investment nearly a decade ago.
Is it just me or is life starting to feel a little normal again?
Summer is in full swing, restaurants are open for business, and vaccines are now pretty easy to come by.
The pandemic is far from over, but still there’s a subtle ease to life again that feels good.
Perhaps it was this week’s announcement that the federal government would be moving forward with reopening the Canada-US border in early-August.
Or the news that Ontario’s colleges and universities would be returning to in-person classes this fall.
Things are inching back to a pre-pandemic status quo.
The Toronto real estate market, having boomed for the better part of the pandemic, is finally taking a rest. Things are quiet. It’s lovely.
Which begs the question: what comes next?
While most experts agree that it was a combination of low interest rates, pent-up demand, and changing buyer priorities that joined forces to drive sales to record levels, even through multiple stay-at-home orders, the undercurrent of it all has been something entirely more structural.
A healthy balanced market is when, simply put, there is an equal level of buyers and sellers.
When there are more sellers than buyers, you have a “buyer’s market.”
When you have more buyers than sellers, you have a “seller’s market.”
Broadly speaking, with the exception of a few blips along the way, Toronto has been a seller’s market for as long as I have been in the business.
In the neighbourhoods popular with upsizing young families, bidding wars are simply the norm.
And why is that? Some might say that it’s because of the widely adopted practice of underpricing as a means of driving multiple offers.
And while, yes, that certainly brings more buyers to the table and thus adds an overt layer of competition, that’s not it. It’s just a symptom of the broader issue.
And this issue is this: if we had sufficient supply in the city of Toronto to meet demand, our current market conditions would be vastly different.
They wouldn’t be spilling out into the secondary markets around us.
The pandemic just shone a light on what has been a mounting reality: our population has grown faster than our housing supply and our government has failed to address it.
At 1.8 million homes behind the G7 average, Canada falls dead last in the number of housing units per 1,000 residents.
Frustratingly, the top-down solutions to this impending crisis have been interruptions to the demand cycle: playing with interest rates, tightening lending qualifications, introducing non-resident speculation and vacancy taxes.
These are Band-Aids. At best they are tools to be used to slow things down while the real solutions come down the pike. We need density. We need intensification. We need thoughtful, strategic building policies that marry environmental responsibility with pragmatic solutions to sprawl.
Instead, the most recent federal budget promised an additional $2.5B over five years to address affordable housing via their Rapid Housing Initiative.
This is a drop in the bucket.
We need expedience not hand wringing.
If government flipped a switch tomorrow it would still take four to five years to see the housing units come to market. The time was yesterday.
So, for those wondering what comes next in our real estate market, it’s a safe bet that once people have enjoyed their summer of reprieve from the strange pandemic reality we find ourselves in, the market will reawaken.
It will simply have to in order to meet the return of students and the backlog of immigration produced by almost 18 months of closed borders. The demand-driven rental and condo sectors that have “softened” and “balanced” these past months will surely surge.
And it was predictable. Market forces, while undeniably complicated and nuanced, have a few inescapable fundamentals – until we prioritize sufficient supply to meet demand, housing unaffordability will be the norm. That part isn’t rocket science.
On Twitter: @brynnlackie
Welcome back to the Real Estate newsletter, which arrives on the heels of a mystery being solved.
Reporters and readers alike have been trying to figure out who paid $25 million for San Marino’s famed USC presidential mansion, and records finally revealed that the buyer was Chinese billionaire Tianqiao Chen. It makes a lot of sense, as the philanthropist recently donated $115 million to Caltech for neuroscience research, and the university dedicated a new 150,000-square-foot facility to him that opened earlier this year just a mile away from the home.
It’s still a great time to sell, and this week saw a few celebrities test their luck in the high-risk, high-reward real estate market. “Charlie’s Angels” star Shelley Hack did about as well as one can do, selling her Santa Monica Craftsman for $11.43 million — or $2.58 million more than her asking price.
Actress Helen Mirren and director Taylor Hackford are hoping for similar success in Hollywood Hills, where their colossal compound on 6.5 acres is on the market for $18.5 million. If the power couple get their price, it’ll be one of the priciest sales the ritzy neighborhood has seen so far this year.
If you don’t believe me regarding the seller’s market, believe the data. The numbers are in for June, and Southern California’s median home price soared to $680,000 last month. That’s an all-time high, shattering a record that stood for all of … 31 days.
Some news on what may come ahead: UC Berkeley researchers published a new report on a California Legislature bill that would allow denser home building in single-family zones. The study says the bill, which passed the state Senate, would produce an uptick in the state’s housing supply, but it likely wouldn’t cause the mass redevelopment that skeptics fear.
While catching up on the latest, visit and like our Facebook page, where you can find real estate stories and updates throughout the week.
When USC’s presidential mansion set a San Marino record by selling for $25 million in early July, it was initially unclear who the buyer was. Real estate records now show it was purchased by Tianqiao Chen, a Chinese billionaire with deep philanthropic ties to the community.
It was pure circumstance how he first came to the area. While watching the news, he and his wife, Chrissy, saw a story of a Caltech scientist helping a quadriplegic man use his thoughts to control a robotic arm and grab a beer.
Shortly after, the couple flew to Pasadena to meet the scientist — a trip that led Chen to give Caltech $115 million for neuroscience research, one of the largest gifts the university had ever received. In 2016, he founded the Tianqiao and Chrissy Chen Institute for Neuroscience at Caltech complete with a three-story, 150,000-square-foot facility on campus that was dedicated to the couple earlier this year.
He’ll have a short commute if he ever visits it, because his home sits about a mile away from the facility.
Hack and her husband, director Harry Winer, are walking away with a huge profit. Not only did they haul in significantly more than their original asking price of $8.5 million, but they also paid just $1.6 million for the property in 1988.
The secluded compound sits about a mile from the ocean in Santa Monica’s North of Montana neighborhood. Across half an acre, there’s a 99-year-old main home, one-bedroom guesthouse, rustic barn and manicured backyard with a deck and pool surrounded by gardens and fruit trees.
Space is at a premium in Hollywood Hills, but not on the sprawling hillside compound of actress Helen Mirren and director Taylor Hackford. The power couple’s longtime property, which spans 6.5 acres at the foot of Runyon Canyon Park, listed for sale at $18.5 million.
If you’re eyeing a shorter stay, it’s also available to be leased at $45,000 per month.
At 6.5 acres, it’s the second-largest property currently available in Hollywood Hills. To put its relative size into perspective, only three estates on the market in the star-studded neighborhood claim more than 3 acres.
According to the listing, there have only been four owners — all famous — since the home was built more than a century ago: “The Squaw Man” actor Dustin Farnum, writer Mark Hellinger, “Perry Mason” producer Gail Patrick, and Mirren and Hackford, who acquired the estate in the 1980s.
Southern California’s real estate market hit another historic peak in June, with home prices soaring to yet another all-time high, though analysts see the extreme bidding wars of the last year beginning to ease.
June’s median home price of $680,000 tops the previous record of $667,000, set in May, according to data released Tuesday by data firm DQNews. It represents a 22.5% increase from June 2020, when the market in the six-county region slowed significantly as sellers pulled homes off the market because of COVID-19 stay-at-home orders.
Since then, a dramatic rebound has seen 11 straight months of double-digit median home price rises.
Experts credit multiple factors: the fast-expanding buyer market of millennials, more demand for space as more people work from home, and ultra-low mortgage rates, which are attracting wealthy investors who compete with the middle class for limited housing stock.
A bill advancing through the California Legislature to allow for denser home building in single-family zones would be likely to produce an uptick in the state’s housing supply, but the so-called upzoning probably won’t cause mass redevelopment, according to a report published Wednesday.
Andrew Khouri and Ari Plachta write that the study by the Terner Center for Housing Innovation at UC Berkeley offers the most detailed analysis yet of the potential effect of Senate Bill 9, designed to allow up to four homes on most single-family lots and spur the construction of badly needed new housing.
Because of the way unit development would pencil out, the study found that “the vast amount of single-family parcels across the state would not see any new development,” said David Garcia, policy director at the Terner Center, which supports the bill written by Senate President Pro Tem Toni Atkins (D-San Diego).
SB 9 passed the state Senate and is expected to be taken up in the Assembly Appropriations Committee by Aug. 27. If approved, it would go to a final vote in the Assembly and then to Gov. Gavin Newsom’s desk. The Terner Center study found that under the bill, a total of 714,000 new homes would make financial sense to build, and it would take years to build them — if they ever are, since not all homeowners would want to sell or develop their own property.
USC is on a selling spree. After unloading its presidential mansion, the school is offering up another home it owns in the Hollywood Hills for $4.25 million, according to House Beautiful. Designed by Frank Lloyd Wright, the stunning abode is listed on the National Register of Historic Places.
If you’re bidding for a home, there’s an increasing chance that the other contenders aren’t trying to live there. They could be an investor, a house flipper, or even a hedge fund, according to NBC News, who reported that investment groups are scooping up homes across the country thanks to their unmatchable financial firepower.
Social-Media Manager, the Most Millennial Job, Comes of Age – The Wall Street Journal
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Virus resurgence menaces economy just as rescue programs unravel – POLITICO
Canadian flag-bearer's parents delightfully cheer on daughter from across the world – Yahoo Canada Sports
This Week in Apps: Clubhouse opens up, Twitter talks bitcoin, Snap sees record quarter – Yahoo News Canada
2021 NHL Draft Tracker: Round 1 picks, notes; Results for Rounds 2-7 – NHL
India flights to Canada: When will they be allowed? – Canada Immigration News