Buyers appear to be coming back to Downtown Vancouver.
While many are still willing to drive out to the suburbs in search of homes, purchasers seem to be enamoured again by the charms of downtown living.
In February 2021, a total of 105 mostly condo properties sold in the area designated as Downtown Vancouver West, which is the urban core.
The area does not include Coal Harbour, Yaletown, and the West End.
The 105 sales last month represent the biggest volume for the past one year.
The COVID-19 pandemic crashed the market for condos in Downtown Vancouver to its lowest point in April 2020, when sales fell to 29 units.
Based on figures by the Real Estate Board of Greater Vancouver (REBGV) and real-estate information site Zealty.ca, downtown sales slowly crept up reaching a high of 82 units by December 2020.
Per Zealty’s tracking, the 105 sales in February 2021 mark a 52.2 percent increase from January 2021.
Moreover, 29 out of the 105 sales, or 27.6 percent, sold either at full or above asking prices.
This ratio represents a 314.3 percent improvement over the rate recorded in January 2021.
Prices remain competitive in Downtown Vancouver West.
The median price for mostly condo properties stood at $699,000 in February 2021, down 0.1 percent from the previous month.
At its lowest point last year in April, the median price was $680,000.
On a per square foot basis, the price in February 2021 was $1,247, up from $1,030 in April 2020.
Earlier in March this year, the Straight reported about an anticipated revival of Downtown Vancouver with the arrival of vaccines and the resumption of travel and tourism.
Top executives of McNeill Lalonde & Associates, a real-estate marketing organization, talked about the subject in an interview over at a Vancouver podcast.
MLA cofounder Cameron McNeill noted that the downtown market may see price increases between 10 to 20 percent in the next 18 months.
McNeill and his business partner Ryan Lalonde both noted that Downtown Vancouver is a “very special” place.
The pandemic has driven many buyers outside the downtown core to find bigger homes and outside spaces.
Also in March this year, the Straight reported about a projection by Dexter Realty about condos and other strata properties.
The Vancouver company believes that these properties are going to be the next star of the housing market, and not just in Vancouver but across the Lower Mainland region as well.
It noted in a report that buyers are “pivoting to condos”.
Purchasers are “looking towards the easing of pandemic regulations”.
This, in turn, “will bring vibrancy back to downtowns and foreign students back to Metro Vancouver campuses”.
“Affordability is part of the equation,” Dexter Realty’s Kevin Skipworth wrote in the report.
In February 2021, the price of a typical condo in markets served by the REBGV stood at $697,500.
Compare this to the benchmark price of a townhouse at $839,800, and detached home, $1,621,200.
The appetite for condos outside Vancouver seems to be growing as well.
David Hutchinson with Sutton Group West Coast Realty told the Straight about a Port Coquitlam condo that was listed on March 16, 2021.
Unit 220, a one-bedroom unit at the River Rock Landing condo development at 2368 Marpole Avenue, was priced at $399,900.
Hutchinson’s client and 17 other buyers placed bids.
The condo sold for $492,000, or $92,100 over asking. His client, who is a first-time buyer, lost.
“I asked the realtor how many offers he was anticipating so we could gauge some kind of pricing strategy,” Hutchinson related.
“We were in the top three, and made it to the top two in back-up offer position, but the other offer removed their conditions,” he continued.
“Naturally, the buyer is discouraged, as are the other 16 buyers who lost out probably are too,” Hutchinson noted.
His client, who came to view the property with her mother, asked if she should “take a break for a little while”, which is a “natural reaction after such an emotionally draining experience”.
“Being a buyer isn’t easy in this market,” Hutchinson said.
What Is the Canada Mortgage and Housing Corporation (CMHC)
The Canada Mortgage and Housing Corporation (CMHC) is a Canadian Crown Corporation that serves as the national housing agency of Canada and provides mortgage loans to prospective buyers, particularly those in need.
Understanding the Canada Mortgage and Housing Corporation (CMHC)
The Canada Mortgage and Housing Corporation (CMHC) serves as the national housing agency of Canada. CMHC is a state-owned enterprise, or a Crown corporation, that provides a range of services for home buyers, the government, and the housing industry.
CMHC’s stated mission is to “promote housing affordability and choice; to facilitate access to, and competition and efficiency in the provision of, housing finance; to protect the availability of adequate funding for housing, and generally to contribute to the well-being of the housing sector.”1
A primary focus of CMHC is to provide federal funding for Canadian housing programs, particularly to buyers with demonstrated needs. CMHC, headquartered in Ottawa, provides many additional services to renters and home buyers, including mortgage insurance and financial assistance programs. CMHC acts as an information hub for consumers, providing information on renting, financial planning, home buying, and mortgage management.
CMHC also provides mortgage loan insurance for public and private housing organizations and facilitates affordable, accessible, and adaptable housing in Canada.2 Additionally, CMHC provides financial assistance and housing programs to First Nations and Indigenous communities in Canada.3
Professionals and Consumers
CMHC provides services to both professionals and consumers. For professionals, CMHC aims to work in collaboration with different groups to provide affordable housing. Services include project funding and mortgage financing, providing information to understand Canada’s housing market, innovation and leadership networks to access funding and talent to spur housing innovation and increase supply, and providing speakers and hosting events for the industry.4
For consumers, CMHC seeks to provide all the tools an individual would need to either buy a home or rent a home and a variety of information and assistance for current homeowners, such as managing a mortgage, services for seniors to age in place, and financial hardship assistance.56
For financial hardship and mortgage assistance, CMHC provides tools that include payment deferrals, extending the repayment period, adding missed payments to the mortgage balance, moving from a variable-rate to a fixed-rate mortgage, and other special payment arrangements.7
Canada Mortgage and Housing Corporation (CMHC) and the National Housing Strategy
In November 2017, the Canadian government announced the National Housing Strategy.8 Rooted in the idea that housing is a human right, this 10-year, $70 billion project will largely be administered by CMHC, although some services and deliverables will be provided by third-party contractors and other Canadian federal agencies.9
Strategic initiatives of the National Housing Strategy include:
- Building new affordable housing and renewing existing affordable housing stock
- Providing technical assistance, tools, and resources to build capacity in the community housing sector and funds to support local organizations
- Supporting research, capacity-building, excellence, and innovation in housing research10
History of the Canada Mortgage and Housing Corporation (CMHC)
CMHC was established in 1946 as the Central Mortgage and Housing Corporation by the federal government in Canada with the primary mission of administering the National Housing Act and the Home Improvement Loans Guarantee Act and facilitating discounts to mortgage companies. Initially, CMHC began by providing housing to returning Canadian war veterans, and toward the end of the 1940s, CMHC began to administer a program providing low-income housing across Canada.11
In 1947, CMHC was responsible for opening Regent Park, a large low-income housing project, and Toronto’s first urban renewal project. By the 1960s, CMHC introduced co-op housing and multi-unit apartment buildings throughout Canada.11
In 1979, the Central Mortgage and Housing Corporation changed its name to the Canada Mortgage and Housing Corporation
Canadian home price gains accelerate again in May
Canadian home prices accelerated again in May from the previous month, posting the largest monthly rise in the history of the Teranet-National Bank Composite House Price Index, data showed on Thursday.
The index, which tracks repeat sales of single-family homes in 11 major Canadian markets, rose 2.8% on the month in May, led by strong month-over-month gains in the Ottawa-Gatineau capital region, in Halifax, Nova Scotia, and in Hamilton, Ontario.
“It was a third consecutive month in which all 11 markets of the composite index were up from the month before,” said Daren King, an economist at National Bank of Canada, in a note.
On an annual basis, the Teranet index was up 13.7% from a year earlier, the 10th consecutive acceleration and the strongest 12-month gain since July 2017.
Halifax led the year-over-year gains, up 29.9%, followed by Hamilton at 25.5% and Ottawa-Gatineau at 22.8%.
Housing price gains in smaller cities outside Toronto and its immediate suburbs again outpaced the major urban centers, with Barrie, Ontario leading the pack, up 31.4%.
On a month-over-month basis, prices rose 4.9% in Ottawa-Gatineau, 4.3% in Halifax and 3.7% in Hamilton.
The Teranet index measures price gains based on the change between the two most recent sales of properties that have been sold at least twice.
Canada‘s average home selling price, meanwhile, fell 1.1% in May from April, Canadian Real Estate Association data showed on Tuesday, but jumped 38.4% from May 2020.
(Reporting by Julie Gordon in Ottawa; Editing by Christopher Cushing)
Bank of Canada seeing signs of cooling in hot housing market
The sector surged in late 2020 and early 2021, with home prices escalating sharply amid investor activity and fear of missing out. The national average selling price fell 1.1% in May from April but was still up 38.4% from May 2020.
“You are starting to see some early signs of some slowing in the housing market. We are expecting supply to improve and demand to slow down, so we are expecting the housing market to come into better balance,” Macklem said.
“But we do think it is going to take some time and it is something that we are watching closely,” he told the Canadian Senate’s banking committee.
Macklem reiterated that the central bank saw evidence people were buying houses with a view to selling them for a profit and said recent price jumps were not sustainable.
“Interest rates are unusually low, which means eventually there’s more scope for them to go up,” he said.
Last year, the central bank slashed its key interest rate to a record-low 0.25% and Macklem reiterated it would stay there at least until economic slack had been fully absorbed, which should be some time in the second half of 2022.
“The economic recovery is making good progress … (but) a complete recovery will still take some time. The third wave of the virus has been a setback,” he said.
The bank has seen some choppiness in growth in the second quarter of 2021 following a sharp economic recovery from the COVID-19 pandemic at the start of the year, he added.
(Reporting by David Ljunggren and Julie Gordon; Editing by Peter Cooney and Richard Pullin)
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