Connect with us

Real eState

How outlier sale in Vancouver condo highrise may be a sign of cooling real-estate market – The Georgia Straight

Published

 on


One might say it’s not an exact apples-to-apples comparison.

However, a number of sales of similar apartments at a downtown Vancouver condo highrise may tell a story.

And that’s one of a real-estate market that has started to cool after the Bank of Canada started to increase interest rates.

In detail, these are condo units at The Pinnacle, a 36-storey highrise at 939 Homer Street in Yaletown.

Their numbers all end in “02”, meaning they are stacked on top of each other, face northwest, have roughly the same layout and measurement, and feature two bedrooms and one bath.

Let’s take four units that sold before the Bank of Canada made the first interest rate hike in 2022.

In the fall of 2021, unit 1202 sold for $745,000; unit 2802, $765,000; and unit 1802, $755,000.

And then on January 13, 2022, unit 2902 sold for $815,000.

Less than three months later, the Bank of Canada increased its interest-setting rate from the pandemic-era low of 0.25 percent to 0.5 percent on March 2.

The central bank followed this up with 0.5 percent increase on April 13.

[The bank increased rates two more times, in June and July, and its key rate now stands at 2.5 percent.]

Two weeks later, unit 3302 at The Pinnacle listed on April 27 for $799,000.

The two-bedroom Vancouver real estate sold six days later on May 3 for $630,000.

Compared to the four other previous sales, one might say the deal for unit 3302 is an outlier.

Vancouver realtor David Hutchinson is familiar with units at The Pinnacle with numbers ending in “02”.

That’s because he was the listing agent for unit 2902, which sold on January 23, 2022 for $815,000.

The sold price for Hutchinson’s listing was over the property’s 2022 assessment of $766,000.

“My client wanted to do a full renovation, but I advised a smaller job so we could list the property quicker,” Hutchinson recalled to the Straight.

The Sutton Group-West Coast Realty explained why.

“I didn’t want to wait that current hot market out too long, and I didn’t want an overly-renovated unit at a higher price because that narrows the buyer pool and the property spends a longer time on the market,” he said.

The seller followed the realtor’s advice.

Hutchinson said: “I thought, he did a good quality, well-timed renovation. If he did not sell at this time, it definitely would’ve taken longer to sell, and that could have lead to him having to settle for lower price.”

As for the seemingly outlier of a sale for unit 3302 at $630,000, Hutchinson suggested that it may be a “kind of a narrow indication of the recent fluctuation in prices due to the sudden changes in the market”.

These changes are primarily elevated interest rates, and what the Vancouver realtor referred to as some “reverse FOMO”.

[FOMO means “fear of missing out”.]

However, Hutchinson qualified that although unit 3302 sold at a lower price compared to previous deals, there may be other and non-market reasons involved.

“It could be a special situation with the seller, like a family situation,” Hutchinson said.

“In any case a sale like this affects the market numbers, and, coincidentally, I now have clients that were looking for one-bedroom-plus-den condos now looking for two-bed condos, and they seem to be happy with the new inventory that is coming on the market,” he added.

Hutchinson may be right in qualifying his statement.

On May 16, another unit with a number ending in “02” listed for $799,900, which was slightly above the previous listing price for unit 3302.

Unit 2702 sold six days later on May 22 above its asking price, when a buyer snapped it up for $825,000. 

More

Adblock test (Why?)

728x90x4

Source link

Continue Reading

Real eState

Former B.C. Realtor has licence cancelled, $130K in penalties for role in mortgage fraud

Published

 on

The provincial regulator responsible for policing B.C.’s real estate industry has ordered a former Realtor to pay $130,000 and cancelled her licence after determining that she committed a variety of professional misconduct.

Rashin Rohani surrendered her licence in December 2023, but the BC Financial Services Authority’s chief hearing officer Andrew Pendray determined that it should nevertheless be cancelled as a signal to other licensees that “repetitive participation in deceptive schemes” will result in “significant” punishment.

He also ordered her to pay a $40,000 administrative penalty and $90,000 in enforcement expenses. Pendray explained his rationale for the penalties in a sanctions decision issued on May 17. The decision was published on the BCFSA website Wednesday.

Rohani’s misconduct occurred over a period of several years, and came in two distinct flavours, according to the decision.

Pendray found she had submitted mortgage applications for five different properties that she either owned or was purchasing, providing falsified income information on each one.

Each of these applications was submitted using a person referred to in the decision as “Individual 1” as a mortgage broker. Individual 1 was not a registered mortgage broker and – by the later applications – Rohani either knew or ought to have known this was the case, according to the decision.

All of that constituted “conduct unbecoming” under B.C.’s Real Estate Services Act, Pendray concluded.

Separately, Rohani also referred six clients to Individual 1 when she knew or ought to have known he wasn’t a registered mortgage broker, and she received or anticipated receiving a referral fee from Individual 1 for doing so, according to the decision. Rohani did not disclose this financial interest in the referrals to her clients.

Pendray found all of that to constitute professional misconduct under the act.

‘Deceptive’ scheme

The penalties the chief hearing officer chose to impose for this behaviour were less severe than those sought by the BCFSA in the case, but more significant than those Rohani argued she should face.

Rohani submitted that the appropriate penalty for her conduct would be a six-month licence suspension or a $15,000 discipline penalty, plus $20,000 in enforcement expenses.

For its part, the BCFSA asked Pendray to cancel Rohani’s licence and impose a $100,000 discipline penalty plus more than $116,000 in enforcement expenses.

Pendray’s ultimate decision to cancel the licence and impose penalties and expenses totalling $130,000 reflected his assessment of the severity of Rohani’s misconduct.

Unlike other cases referenced by the parties in their submissions, Rohani’s misconduct was not limited to a single transaction involving falsified documents or a series of such transactions during a brief period of time, according to the decision.

“Rather, in this case Ms. Rohani repetitively, over the course of a number of years, elected to personally participate in a deceptive mortgage application scheme for her own benefit, and subsequently, arranged for her clients to participate in the same deceptive mortgage application scheme,” the decision reads.

Pendray further noted that, although Rohani had been licensed for “a significant period of time,” she had only completed a small handful of transactions, according to records from her brokerage.

There were just six transactions on which her brokerage recorded earnings for her between December 2015 and February 2020, according to the decision. Of those six, four were transactions that were found to have involved misconduct or conduct unbecoming.

“In sum, Ms. Rohani’s minimal participation in the real estate industry as a licensee has, for the majority of that minimal participation, involved her engaging in conduct unbecoming involving deceptive practices and professional misconduct,” the decision reads.

According to the decision, Rohani must pay the $40,000 discipline penalty within 90 days of the date it was issued.

 

728x90x4

Source link

Continue Reading

Real eState

Should you wait to buy or sell your home?

Published

 on

The Bank of Canada is expected to announce its key interest rate decision in less than two weeks. Last month, the bank lowered its key interest rate to 4.7 per cent, marking its first rate cut since March 2020.

CTV Morning Live asked Jason Pilon, broker of Record Pilon Group, whether now is the right time to buy or sell your home.

When it comes to the next interest rate announcement, Pilon says the bank might either lower it further, or just keep it as is.

“The best case scenario we’re seeing is obviously a quarter point. I think more just because of the job numbers that just came out, I think more people are just leading on the fact that they probably just gonna do it in September,” he said. “Either way, what we saw in June, didn’t make a big difference.”

Here are the pros of buying/ selling now:

Pilon suggests locking in the rate right now, if you don’t want to take a risk with interest rates going up in the future.

He says the environment is more predictable right now, noting that the home values are transparent, which is one of the benefits for home sellers.

“Do you want to risk looking at what that looks like down the road? Or do you want to have the comfort in knowing what your house is worth right now?” Pilon said.

And when it comes to buyers, he notes, the competition is not so fierce right now, noting that there are options to choose from.

“You’re in the driver seat right now,” he said while noting the benefits for buyers.

Here are the cons of buying/ selling now:

He says one of the cons would be locking in the rate right now, then seeing a rate cut in the future.

The competition could potentially become fierce, if the bank decides to cut the rate further more, he explained.

He notes that if that happens, the housing crisis will become even worse, as Canada is still dealing with low housing inventory.

An increase in competition would increase the prices of houses, he adds.

Selling or buying too quickly isn’t the best practice, he notes, suggesting that you should take your time and put some thought into it.

Despite all the pros and cons, Pilon says, real estate remains a good investment.

According to the latest Royal LePage House Price Survey for the second quarter of this year, the average home price in Canada is $824,300. That’s up 1.9 per cent from the same time last year, and up 1.5 per cent from the first quarter of 2024.

In the Ottawa Housing Market Report for June 2024, the average price of a home was up 2.4 per cent from this time last year to $686,535, but down 0.6 per cent from May 2024.

Experts believe many potential buyers are still hesitant of jumping into the housing market and waiting for another interest rate cut of 50 to 100 basis points.

“I don’t think it’s going to be the rush that we see in the past, because people are used to more of a conservative approach right now,” said Curtis Fillier, president of the Ottawa Real Estate Board. “I think there’s still a bit of a hold back, but I definitely do think with another rate cut, we’ll probably see a very positive fall market.”

With files from CTV News Ottawa’s Kimberly Fowler

 

728x90x4

Source link

Continue Reading

Real eState

Real estate stocks soar to best day of year on rate cut bets

Published

 on

(Bloomberg) — The stock market’s worst group notched its best day of the year as a cooler-than-expected inflation report stoked bets that the Federal Reserve will start cutting interest rates in September.

Shares of real estate companies jumped 2.7% Thursday for their biggest gain of 2024, climbing to their highest level since March as investors snapped up homebuilder, digital and commercial real estate stocks alike. Real estate also was the best-performing group in the S&P 500 Index Thursday, with volume that was around 30% higher than the 30-day average, according to data compiled by Bloomberg.

Arguably the most significant news to come from the latest consumer price index reading was a pullback in housing-related inflation. Shelter costs rose just 0.2% for the slowest monthly increase in three years. Homebuilders, which have risen 7.1% this year, were up 7.3% for the session, the most since 2022. Shares of D.R. Horton Inc., which is scheduled to report earnings next Thursday, gained 7.3%.

“Housing has really been the last shoe to drop in terms of winning the battle against high inflation,” Preston Caldwell, chief U.S. economist at Morningstar wrote in a note to clients Thursday. “Leading-edge data has strongly indicated for some time now that a fall in housing inflation was in the works.”

A rally in real estate stocks is bad news for short sellers who have been piling into the group, which is the worst performer in the S&P 500 this year. To start the week, short interest as a percentage of float hovered near 49% in the SPDR Homebuilders ETF, the highest level since February for the exchange-traded fund, according to data from S3 Partners.

Property owners are rallying as well. Real estate investment trusts, which were brutally penalized during the two-year run up in borrowing costs, advanced by as much as 3%. And the outlook for the group appears to have turned a corner, according Rich Hill, senior vice president and head of real estate strategy and research at Cohen & Steers Capital Management.

“We think this is a compelling backdrop for listed REITs especially as fundamental growth remains on solid footing,” he said, referencing the latest inflation data and rate outlook. “The rally that started in October of 2023 pushing returns more than 20% above their trough looks set to continue if inflation cools and interest rates continue to decline.”

Shares of industrial REIT Prologis Inc., which reports second-quarter results on Wednesday, rose 3.3% to hit their highest level since April. U.S. Treasury yields tumbled, with the 10-year bond falling to 4.2% and the policy-sensitive two-year note slipping to 4.5%.

(Updates indexes and stock prices for market close.)

 

728x90x4

Source link

Continue Reading

Trending