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Real estate sales, prices rise across Vancouver Island

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The pandemic isn’t slowing down Vancouver Island’s real estate market.

The Vancouver Island Real Estate Board recorded 1,101 sales last month, which marks a 39 per cent increase from August 2019.

All told, 547 single-family detached properties (excluding acreage and waterfront) sold in August, a year-over-year increase of 35 per cent.

Meanwhile, sales of condo apartments rose by 43 per cent year over year while row/townhouse sales increased by 19 per cent.

“Our housing market rebounded from the COVID-19 downturn far more quickly than expected,” says VIREB president Kevin Reid. “Pent-up demand, low interest rates, and persistent supply shortages are fueling the recovery.”

Reid added that the economic impacts of COVID-19 hasn’t affected people who are already in a position to buy real estate.

“A lot of people who are purchasing real estate are bringing significant amounts of equity or money to their deal, and the mortgage rates are very, very good right now, and it’s a good time to acquire a mortgage and purchase property,” he added.

Supply and demand are definitely having an effect on the market, Reid explained: “We still have a shortage of quality homes in the $400,000 to $600,000 range.”

According to Reid, the hotspots along the east coast of Vancouver Island include Nanaimo, Cowichan Valley, Parksville, Qualicum, the Comox Valley, and Campbell River.

“We’re seeing very healthy volumes of sales in all those areas,” he said.

Reid says its affordability and natural beauty make Vancouver Island “the most desirable place to live in Canada.”

He added that the island’s smaller communities are becoming more desirable for buyers looking to move out of larger cities.

“People need homes. A lot of family life is centred around the home, having a safe place to be, (and) the pandemic has highlighted safety and distance, so people are liking their single-family homes with a nice yard, close to some nice places to recreate where they are not in a very dense population, so we are seeing some migration out of major population centres, like cities, for example, moving to smaller communities.”

Reid acknowledges there is still uncertainty around the Canadian economy and U.S. election, but he is optimistic, a sentiment echoed by the British Columbia Real Estate Association.

“The outlook for the B.C. housing market is much brighter following a surprisingly strong recovery,” said Brendon Ogmundson, BCREA Chief Economist. “We expect home sales will sustain this momentum into 2021, aided by record-low mortgage rates and a recovering economy.”

BCREA expects unit sales on Vancouver Island to hit 8,300 in 2021, a 15 per cent increase over the 7,200 sales projected this year.

Prices are also inching out in most regions.

The benchmark price of a single-family home hit $533,300 in August, an increase of three per cent from the previous year but two per cent lower than in July. (Benchmark pricing tracks the value of a typical home in the reported area.)

The year-over-year benchmark price of an apartment rose by five per cent, hitting $312,000 but down marginally from July. The benchmark price of a townhouse rose by four per cent year over year, climbing to $432,300 and up by one per cent from July.

For the Malahat and area, the benchmark price of a single-family home last month was $610,200, a seven per cent increase from August 2019.

In Campbell River, the benchmark price hit $455,600, up two per cent over last year.

In the Comox Valley, the benchmark price reached $537,300, up by three per cent from one year ago.

Duncan reported a benchmark price of $480,200, an increase of one per cent from August 2019.

Nanaimo’s benchmark price rose by three per cent to $575,100, while the Parksville-Qualicum area saw its benchmark price increase by three per cent to $608,300.

The cost of a benchmark single-family home in Port Alberni reached $329,100, a four per cent increase from one year ago. For the North Island, the benchmark price was $221,000, an 11 per cent increase over last year.

Source: – My Cowichan Valley Now

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Real Estate Investments in Greater Vancouver Offer Most Attractive Investment Yield

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Is there an investment asset that can produce a 366 percent return in a three-decade span? Yes, it is the housing property in Canada. Is there an investment asset that can beat this performance? Yes, it is the property in Greater Vancouver in British Columbia, Canada. Indeed, Greater Vancouver has proven to be one of the real estate investment hotspots, given its appeal as an investment market that boasts natural beauty, strong economic and demographic fundamentals, and financial stability, which ensures optimal yield for a low level of investment risk.

Property prices in Greater Vancouver, BC, have risen by some 473.7 percent in the period between 1980 and 2009, yielding, on average, a spectacular 17 percent per annum over the noted period. In other words, according to the Canadian Real Estate Association (CREA) and RE/MAX Canada, the average price of residential property in Greater Vancouver in 1980 was slightly over $100,000. Today, that same property is worth, on average, somewhat more than $574,000.

The noted return on investment looks incredibly attractive, given the low risk associated with residential property investments. Investments in residential real estate in Greater Vancouver have been characterized by exceptional stability. The average price of a house in Greater Vancouver dipped seven times in the past 30 years. Most of the dips occurred in the late 1990s. However, all declines in average prices of homes in Greater Vancouver have been exceptionally mild, with the largest annual decreases not exceeding 3.5 percent.

This performance of real estate investments in Greater Vancouver looks remarkable compared to the implementation of property investments in the Canadian housing market as a whole or performance of investments in most other regional real estate markets in Canada. As noted earlier, the average price of a property in Canada has risen by 366 percent between 1980 and 2009. This translates into an average annual return of 13 percent in the same period. Only Victoria, Regina, Toronto, and Ottawa have recorded returns higher than this average for Canada as a whole. Victoria, located in British Columbia, has the second-highest return on residential real estate investments in the Canadian property market. An investment in Victoria’s housing property has returned 448.5 percent in total return, or 16 percent on average each year between 1980 and 2009. This makes British Columbia the best performing regional property market in Canada.

On the other hand, taking an international investment perspective, even less robust, would have been investment returns on U.S. real estate. Based on the average values of homes in the United States between 1980 and 2009 (using the Freddie Mac Conventional Home Price Index), an investment of $100,000 in residential properties in the United States in 1980 would be worth $382,576 today. This would represent a total return, measured by the increase in home prices, of 283 percent over the noted period. In other words, an investment in the real estate market in the United States would have produced an average nominal yield of 10 percent per annum, which is much lower than that earned on the property investment in Greater Vancouver.

Investments in residential real estate in the Greater Vancouver area look exceptionally appealing, given their outstanding performance relative to property investments in other regions of Canada and the U.S. real estate market. Therefore, investing in Greater Vancouver’s property market can represent an investment choice that promises high yield for a low level of investment risk.

 

 

 

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Vancouver real estate: early September numbers show steep drop in sales from August highs – The Georgia Straight

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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.

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Real Estate Roundup 9.25.20 – Real Estate Daily Beat

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Real Estate Roundup

Office news 

  • 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)

Retail 

  • 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)

Leasing 

  • 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)

Tech 

  • 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)

Other news

  • 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)

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