B.C. realtors expect not only to sell more homes this year and the next compared to 2019.
They also anticipate prices to rise in 2020 and 2021.
The B.C. Real Estate Association predicts 2020 to finish with a 7.7 percent increase in average price over 2019.
The BCREA also forecasts a further increase of 3.7 percent in 2021.
In Greater Vancouver, the association anticipates the average price to jump 5.9 percent over 2019.
For 2021, the average price in the region is predicted to rise 2.4 percent.
In the Fraser Valley, the BCREA expects the average price to grow 6.7 percent in 2020, and 2.6 percent in 2021.
It can be recalled that the Canada Mortgage and Housing Corporation thinks otherwise.
On June 4, 2020, CMHC predicted a nine to 18 percent decline in average home prices in the country over the next year.
The federal housing agency reiterated its dim outlook a few weeks later on June 23.
That was when CMHC released its outlook report for the summer market.
“House prices will likely fall because of uncertainty over the economy’s path,” the agency stated particularly for major urban centres.
Unlike the CMHC, the BCREA has rosy prospects, which it laid out in its third quarter housing forecast Tuesday (August 25).
In terms of sales, the association predicts 82,380 transactions in 2020, representing a 6.5 percent increase over 2020.
In 2021, the BCREA forecasts sales to rise to 96,860, for a further 17.6 percent increase.
According to the association, a “recovering economy and low mortgage rates” will “drive demand”.
The BCREA noted that market activity has been strong amid the ongoing COVID-19 pandemic.
While sales “initially fell to historic lows in April”, the association noted that the market later “soared, more than regaining pre-pandemic levels”.
The same phenomenon happened in the rest of the country.
The Canadian Real Estate Association recently reported that the residential market set a new record in July 2020.
The CREA reported that sales last month “posted the highest level of any month in history”.
According to the national association, a total of 62,355 transactions happened in July 2020, marking the “highest monthly sales figure on record going back more than 40 years”.
In its third quarter housing forecast, the BCREA noted that the recession caused by the pandemic is “on pace to be one of the worst on record” for the province.
“However, looking at recent data in the housing market, it would be difficult to tell there was a recession at all,” the association stated.
The BCREA pointed out that the “explanation for the counter-intuitive performance of the housing market lies in the very unusual characteristics of the COVID-19 recession”.
“Unlike in a typical recession, many of the job losses have been felt in lower-wage, frontline service sector jobs, typically held by younger workers,” the association stated.
“Meanwhile,” the BCREA continued, “higher-wage sectors that tend to drive the ownership market have seen employment levels fully recover.”
“As a result, sales activity has spiked as record-low mortgage rates unleashed a wave of pent-up demand previously sidelined by the pandemic,” the association explained.
Vancouver real estate: early September numbers show steep drop in sales from August highs – The Georgia Straight
Home sales in the city of Vancouver are dropping big time.
This is based on tracking by real-estate site fisherly.com as of late morning Friday (September 25).
Compared to record highs in August, early numbers for September show a steep decline in transactions.
In August, a total of 490 condo units sold in Vancouver.
As of this posting September 25, fisherly.com recorded 202 condo sales so far this month.
Last month, 212 detached homes changed owners.
September sales so far show 114 freestanding houses sold in the city.
As for townhouses, 99 sold in August.
As of September 25, only 49 townhouses have been purchased.
Vancouver home sales peaked in August, following a steady recovery that started in May.
Transactions crashed in April during the height of the COVID-19 lockdowns.
RBC Economics previously issued a report noting that pent-up demand for homes drove real estate sales in the country this summer.
However, according to the bank’s report, this demand is largely spent, and that the market’s momentum is expected to decelerate in the fall.
The Canadian Real Estate Association has forecast that after its highs and lows, 2020 may likely end up as a “fairly middling year overall”.
It remains to be seen whether the Vancouver market will stage a late September rally to boost numbers.
Real Estate Roundup 9.25.20 – Real Estate Daily Beat
Real Estate Roundup
- SL Green and Jacob Chetrit have resolved their dispute over the broken contract for the Daily News Building. (TRD)
- Global pricing and demand for office space will take almost five years to recover from the damage wrought by the pandemic, according to a report by Cushman. Vacancies worldwide are expected to peak at 15.6% in 2022, with about 95.8 million SF of space emptying over the next two years. That’s more than during the 2008 financial crisis, when tenants abandoned 85 million square feet of offices. (Bloomberg)
- Barclays is set to ramp up staff numbers in New York next month, asking a fresh contingent of employees to be “primarily office-based”, as the UK lender prepares to U-turn on its plans to bring more people to its Canary Wharf headquarters. (FinancialNews)
- Mizuho Financial Group plans to trim office space in New York and London in anticipation that some staff will keep working from home even when the coronavirus pandemic is over. (Bloomberg)
- When Everybody’s Working At Home And The Magic Is Gone. (NPR)
- Brookfield Properties and Namdar Realty are separately requesting they be allowed to give up their J.C. Penney-anchored malls to special servicers to avoid loan foreclosure. The action is known as a “deed-in-lieu.” Mall owners most likely to default are those with CMBS debt. Such loans are difficult to restructure because of covenants bondholders have with servicers. (TRD)
- Spring Education Group has signed a 20-year lease for 34,500 SF at Albanese Development’s 556 West 22nd Street. The group’s BASIS Independent Schools will occupy the entire three-story building to serve students in grades 6 through 12. (TRD)
- Although Zillow has long denied it wants to become a real estate brokerage, the changes to its iBuying program mean it is doing just that. Previously, Zillow worked with local real estate agents to complete both ends of the transaction, but now it will instead use its own employees who are licensed real estate agents. (MotleyFool)
- Co-living firm Common has raised $50 million in new venture capital this month. Earlier this summer, competitor Juno Residential launched with $11 million in venture funding. (WSJ)
- New York Community Bank and Signature were among the top five most-active lenders in New York in the first half of the year, and almost all of their portfolios are tied to the area. With retail and apartment vacancies rising and rents falling, and with the prospect of employers cutting their office space looming, the question is whether the hundreds of millions of dollars the banks have set aside for commercial-property loan losses will be enough. (Bloomberg)
- Blackstone’s China Real Estate Head Tim Wang leaves after 10 years. (Bloomberg)
- Blackstone Group closed on the largest real-estate debt fund ever. The private equity firm began raising money for the fund in the spring of 2019, and ultimately took in $8 billion. Fundraising got a boost after Covid-19, partly because interest rates fell, increasing the appeal of relatively high-yielding real estate debt. (WSJ)
National Real Estate Deal Roundup 9.25.20 – Real Estate Daily Beat
National Acquisitions Roundup
- Amazon has acquired 550 Army Navy Drive in Pentagon City, Virginia from the Blackstone Group for $148.5 million. The tech giant plans to demolish the existing Marriott hotel and utilize the 1.5 acres of land as part of its second headquarters. With the deal, Amazon now owns the entire 11.6-acre PenPlace. The site was always part of the company’s HQ2 plans, but the hotel remained the last holdout, and it appeared the company would just build around it. (CO)
- A consortium of South Korea’s Hana Alternative Asset Management has signed a contract to acquire a 38-story office tower in downtown Seattle for around $686 million. Skanska USA’s newly-constructed Qualtrics Tower spans 701,000 SF. Tenants include Qualtrics, Indeed, Dropbox, and co-working firm Spaces. (KI)
- Invictus Real Estate Partners has purchased the remaining 90 percent stake in The Waypointe at 515 West Avenue in Norwalk, Connecticut from Carmel Partners. The two-building complex, which includes 56,000 SF of ground floor retail and restaurant space, opened in 2015. Its apartments are currently 93 percent occupied, while the retail space is 74 percent leased. The deal valued the asset at $157 million. (TRD)
- As part of its ongoing industrial real estate expansion, PGIM Real Estate has acquired a 40 percent interest in a 5.4 million-square-foot, 12-complex industrial portfolio valued at $700.5 million. PGIM acquired the stake in the portfolio through a recapitalization of the interest in a JV with partner IAC Properties and a subsidiary of Perlmutter Investment Company. At that valuation, the deal works out to a 4.7 percent cap rate. The portfolio includes 30 industrial properties spread throughout the 12 complexes, which altogether are 97 percent leased. (CO)
- July Residential and Firm Capital Apartment REIT have acquired North Pointe at 5735 29th Avenue in Hyattsville, Maryland from FCP for $37.5 million. The 19-building apartment community contains 234 units. (CO)
National Leasing Roundup
- Netflix has signed a 171,000-square-foot office lease in Burbank near major competitors like Warner Brothers and Walt Disney. Netflix’s new space is at 2300 West Empire Avenue near the 5 Freeway in Los Angeles County. Earlier this month, CEO Reed Hastings told WSJ that he expects employees back in the office once a coronavirus vaccine is available. (CO)
- Logistics and storage firm Mega Lion has signed a 132,423-square-foot lease at 13021 Leffingwell Road in the Mid-Cities submarket of Los Angeles County. Golden Springs Development owns the property. Asking rent on the five year lease was reportedly $0.90 per SF, triple net. (CO)
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