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Metro Vancouver real estate: March home sales the highest ever recorded

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VANCOUVER —
Last month’s residential home sales were the highest ever recorded in a single month.

The Real Estate Board of Greater Vancouver said in a report Friday March sales were 126 per cent higher than in the same month in 2020.

The board said a total of 5,708 homes were sold last month, compared to 2,524 sales the previous March, when the pandemic was just beginning.

The March 2021 number is also 53 per cent higher than the total of homes sold this February (3,727).

While demand in urban areas is often not a surprise, the board says last month demand was most pronounced in rural areas and suburbs.

South Delta saw the largest increase with sales 196 per cent higher than in March 2021. This is the largest increase in all of Metro Vancouver, according to the REBGV.

Whistler and Squamish, too, saw a greater demand, with 195 and 189 per cent more sales this March than last.

The board said detached homes were significantly (130 per cent) more popular this March than in the same month in 2020, while apartment sales were up 129 per cent year-over-year, and attached home sales up 112 per cent.

The board also looked at what homes are selling for.

The benchmark – a calculation based on the average home size, age and other factors – for a detached home in Metro Vancouver has reached $1.7 million, up about 18 per cent where it stood in March 2020.

Last month’s benchmark for apartments or condos is $715,800, while attached homes have the benchmark of $872,200.

These benchmarks are for the entire region, and vary significantly when looking at more specific locations.

For example, the benchmark for a condo in West Vancouver is $1.143 million, while it’s just $403,900 in Maple Ridge.

Would-be buyers of the standard townhouse in Vancouver West can expect to pay $1,188,300, but that benchmark is cut almost in half looking in Pitt Meadows.

And according to the REBGV, single-family detached homes go for about $1.5 million when looking at all of the Lower Mainland, but can still be bought for $765,000 on the Sunshine Coast. In West Vancouver and Vancouver West, buyers are likely to pay more than $3 million, based on the latest figured from the board.

A stronger economy, historically low interest rates and high demand for more space are being credited for the latest market gains.

Here’s the full report.

Source:- CTV News Vancouver

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Health

Budget Tips Canadians Should Consider Before Renovating Their Home

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Budget Tips

The decision to undergo a home renovation project should be exercised with an equal amount of excitement and caution. Most renovations require dealing with the foundation, plumbing, or electrical within the home, producing significant costs.

Canadians should approach each renovation with a firm understanding of their finances, especially if the project will involve a contractor or paid professional. To make sure you’re on the right track, these budget tips can help.

1.   Estimate Your Costs

If you’re considering a renovation on your home you’ve likely come up with temporary plans and dreamed-up colour schemes and design ideas. The next step is evaluating the costs for each renovation to determine if you have the financials you need to get started.

When it comes to budgeting for a home renovation, it’s important to overprepare — creating a spreadsheet outlining each project and your projected costs will help you visualize your expenses. Once you have your costs in front of you, you’ll want to pad your budget slightly. Renovations are synonymous with surprises and inflated costs, and it’s always better to be overprepared.

2.   Find Savings with DIY

One of the simplest ways to lower your renovation expenses is to take on specific projects yourself. The DIY approach can range from construction-based projects to simply painting the walls or re-furnishing your old furniture — it all depends on how handy you are and the time you have to contribute to the project. If you can manage to save money on professional painters or lessen the number of construction workers on any project, your chances of saving money are far more significant.

3.   Know Your Financing Options

Ideally, you’ll want to have as much money saved as possible before undergoing any projects in your home. Every household is unique, which means your financing options may vary from your neighbours. What you’ll need to ask yourselves is, how much money will you require to complete this renovation and will you be able to pay back potential loans?

Homeowners are looking for alternative lending options that don’t require the stress and time that can come with traditional lenders — extensive interviews, paperwork, and the time it takes to receive any cash is unfavourable for most.

These days, homeowners are looking at online-only lenders like Flexmoney.ca for a faster, more convenient way to access the money they need to complete their projects. The new wave of lenders is focused on helping borrowers access the cash they need quickly and without the added stress of waiting and wondering if they’ve been approved. It’s easier to focus on what needs to be done in your home when you have the funds you need to get the job done.

4.   Shopping Second-Hand

The idea of second-hand is still new for many homeowners, who are hesitant to purchase things for their homes that have been previously used. The reality is that second-hand goods are a beneficial tool for anyone looking to save money on their renovation. With some time and patience, you could find great deals on appliances, furniture, and home decor. With the extra savings, you can focus on the areas of the home that need the additional capital — or, if you’re right on budget, any money you’ve saved could go into a savings or investment account.

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Economy

The housing boom, central banks and the inflation conundrum

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By Sujata Rao

LONDON (Reuters) -A multi-year boom in global house prices which even a pandemic has failed to halt is forcing central banks around the world to confront a knotty question – what, if anything, should they be doing about it?

The surge in property values from Australia to Sweden is often viewed benignly by governments as creating wealth. But history also shows the risk of de-stabilising bubbles and the high social cost as millions find home ownership unaffordable.

The irony is that while the cheap money created by low or negative interest rates has driven the price rises, they barely figure in central banks’ calculations of inflation, one of the key drivers of their monetary policy.

While housing costs, whether rent or home repairs, are assigned varying weights in inflation indices ranging from 40%-plus in the United States to 6.5% in the euro zone, house prices themselves are left out. As they spiral higher and higher, many argue this is no longer tenable.

“The debate of whether we actually are reflecting inflation properly will come up more and more. House prices will start getting a lot of attention,” said Manoj Pradhan, co-author of a book called The Great Demographic Reversal, which predicts a global inflation resurgence in coming years.

Global residential property prices have risen 60% in the past 10 years, according to a Knight Frank index. In 2020, even as COVID-19 choked the world economy, they climbed an average 5.6%, with 20%-30% jumps in some markets.

While low interest rates have long been the main driver of the rally, existing government subsidies for home ownership and more recently pandemic-era support such as suspending property taxes have been factors too.

Many of these one-off support measures will start to be wound down, but governments often fight shy of politically tricky measures to keep a lid more firmly on prices, such as banning multiple property ownership or easing building regulations.

That raises the question of what central banks can do.

FIRST SALVO

New Zealand’s government fired the first salvo in February when it told its central bank to consider the impact of interest rates on house prices, which soared 23% last year.

Others are considering the question too. European Central Bank President Christine Lagarde said last week that measuring housing’s role in the rising cost of living had emerged as a key point in a strategic policy review due to be unveiled this year.

If real inflation is higher than the official consumer price index is measuring, it could imply that central bank or government policies are more expansionary than they should be.

“If housing does not signal inflation via the CPI, then the economy is more likely to run hot, and what you get over time is generalised inflation pressures,” Pradhan said.

At present rental inflation is subdued due to pandemic hardship, or because low interest rates and remote working are encouraging home-buying.

Morgan Stanley’s chief cross-asset strategist Andrew Sheets said this may be giving a misleading signal. “The rental market will be weak and the housing market will be strong and that (rental weakness) could show up as a disinflationary force.”

There are strong arguments for excluding headline shifts in house prices from inflation indexes. Housing is, for most people a lifetime purchase rather than an ongoing expense, which they are designed to gauge.

Including house prices in the inflation measures central banks use to guide policy is also widely seen as impractical, given their extreme volatility.

More central banks may however consider adapting inflation indices to include a measure of the costs associated with living in one’s own home, such as maintenance and home improvements.

At present, inflation measures used by the Fed, the Bank of Japan, New Zealand and Australia include so-called owner-occupier costs. But the gauge employed by the Bank of England does not, and they are also not factored into the main inflation measure used by the ECB.

The ECB has argued for their inclusion, but collecting timely data from 19 countries and differing home ownership levels across the bloc would complicate the task.

Crucially, economists believe including these costs might have lifted euro zone inflation by 0.2 to 0.3 percentage points, taking the ECB nearer its elusive inflation target of close to 2%.

LONG-DORMANT INFLATION

Ultimately, such policymaking shifts may be risky amid uncertainty created by the pandemic.

Adding property prices to CPI indexes just as long-dormant inflation finally awakes could send readings soaring, heaping pressure on central banks to tighten policy even as economies nurse pandemic-time wounds.

Some analysts, such as at ING Bank, predict that with some exceptions housing rallies may anyway start to cool as support measures introduced during the pandemic are unwound.

Voters’ anger may even goad governments into slugging property investors with higher taxes – as New Zealand did at the end of March.

Those who argue against extending central bank remits further into housing say tighter policy could even exacerbate the problem by crimping property supply.

George Washington University professor Danny Leipziger argues housing markets are more effectively cooled by regulation and measures outside central banks’ scope, such as raising capital gains taxes and increasing the supply of housing.

“I have no problem with the ECB adding rental or home-owners’ costs to its basket,” Leipziger said. “But if I am concerned about house prices in Berlin or Madrid, asking the ECB to deal with it is not the right way.”

(Additional reporting by Dhara Ranasinghe and David Milliken; Editing by Mark John and Jan Harvey)

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Real eState

Canadian home prices on fire and policymakers using ‘squirt gun’

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By Julie Gordon

OTTAWA (Reuters) -Buyers are turning up the heat on Canada‘s searing hot housing market, their frenzy leading to record sales, prices and starts, but in a budget unveiled on Monday the federal government did little to tamp down the fire.

The Teranet-National Bank Composite House Price Index showed home price gains accelerated 1.5% in March from February, data released on Tuesday showed.

The index was up 10.8% on the year, with a record 81% of the broader 32 markets surveyed posting annual gains above 10%. That far exceeds the last peak in 2017.

On Monday, Finance Minister Chrystia Freeland, presenting Canada‘s first budget in over two years, fleshed out a previously announced tax on foreigners parking money in Canadian homes, along with limited investments in affordable housing.

“The idea here is that homes are for Canadians to live in. They are not assets for parking offshore money,” Freeland told reporters.

For those watching, it was nowhere near enough.

“It’s like a squirt gun next to a towering inferno,” said Doug Porter, chief economist at BMO Capital Markets.

“We need to break the psychology that real estate is this can’t lose investment that only goes up,” he added. “Before this turns into a full-on bubble.”

March was a record month for new housing starts and home resale prices surged 31.6% year-over-year.

New Zealand, facing a similarly red hot market, introduced a raft of cooling measures including new taxes on investors and stricter lending rules.

While the Bank of Canada has become increasingly vocal on the issue, it has also pledged to keep interest rates at record lows into 2023. It will update its forecasts Wednesday.

And most measures that would cool the frenzy are up to the provinces and federal government who remain cautious as a third wave of COVID-19 rages.

Real estate agents say more listing are now coming to market, but they still see a massive long-term shortage. They expected more than the 35,000 units pledged in the budget.

“It’s not going to do much to intervene in the activity level we’re seeing now across the country,” said Christopher Alexander of RE/MAX Ontario-Atlantic.

(Reporting by Julie Gordon in OttawaEditing by David Gregorio and Alistair Bell)

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