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Whistler real estate stayed steady in Q2 – Pique Newsmagazine

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Whistler’s real estate market stayed mostly steady through the second quarter of 2021, while Pemberton’s hit historic levels in both the number of transactions and sales value.

In Whistler, the red-hot end of 2020 and first quarter of 2021—which saw some of the busiest months of the last five years—seems to have cooled, as the total number of sales fell closer to the monthly average.

Local realtors counted 68 sales in April and 73 in May—slightly above the eight-year monthly average of 60, but well below the 115 sales recorded in February and the 111 recorded in March.

The average sale price for a single-family home in Whistler also continues to climb, from $3,264,947 in 2020 to $3,495,481 in 2021.

“Single-family obviously were the hot item, if they were priced right, [but] we saw a flurry of multiple offers on many properties … All in all, our market is fairly strong and steady,” said Ann Chiasson of RE/MAX Sea to Sky.

“Some of the prices have gotten pushed a little high based on the fact that we had a frenzy and things were very active, and I don’t think our market is going to drop significantly at all, because there’s such a housing shortage and we don’t have a lot of listings.”

In Pemberton, realtors tallied $37 million in total sales volume on 40 transactions in April—well above the previous high of $21 million in September 2020, and the five-year monthly average of about $9 million.

“Pemberton is in a whole different league now,” Chiasson said. 

“People woke up and realized that it’s 25 minutes from Whistler, and you can buy more house for less money, so the price points there are actually creeping up in the single-family home range.”

Since 2015, the average price of a single-family home in Pemberton has climbed from $641,579 to $1,248,141.

The overall average sales value in Pemberton as of June 30 was $886,000—a jump of about 25 per cent from the end of 2020, according to the Whistler Real Estate Company’s Pat Kelly.

“Pemberton is off the chain, really,” Kelly said, noting that you can buy a lot and build a house for under $2 million in Pemberton.

“You can’t do that in Whistler. So people are looking further abroad for opportunities.”

Developers are working with the Village of Pemberton to bring more product onto the market, which is not currently happening in Whistler except for on a much smaller scale, Kelly said, pointing to projects like the Empire Club development on Nita Lake or the enhanced rezoning process for the Northlands.

But with Whistler doing somewhere between 650 to 1,000 transactions per year on average, “adding 30 or 50 or 100 units to the overall mix isn’t going to really change anything,” Kelly said.

While Whistler’s activity levels fell about 35 per cent in Q2, the pace of business is still above the historical average, but indicative of the lack of active listings, Kelly said.

And demand for Whistler properties isn’t likely to drop off either, he added.

“I think we’re going back to [where we were] prior to COVID—2018, 2019, we had a very stable market,” he said.

“I think you’re going to see a lower activity level, but it’s still at some fairly rare air price-wise. [And] Pemberton will continue to be very popular for people. It’s still the lowest-priced place to buy property in the corridor, that I’m aware of.” 

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This Week's Top Stories: Canadian Real Estate Slowdown Is Just Getting Started & “This Time Is Different” – Better Dwelling – Better Dwelling

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This Week’s Top Stories: Canadian Real Estate Slowdown Is Just Getting Started & “This Time Is Different” – Better Dwelling  Better Dwelling



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BC real estate: 40% of Cullen Commission focuses on sector – Pique Newsmagazine

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Despite being unable to determine the exact impact money laundering has on home prices, the real estate sector is of top concern to the Commission of Inquiry into Money Laundering in B.C.

Of the 101 recommendations Commissioner Austin Cullen made in his June 15 final report, 40 are directly related to real estate, and several others are ancillary, such as proposals to strengthen anti-money laundering (AML) policies within financial institutions and the asset forfeiture legal regime, as well as greater controls on notaries and lawyers, who process transactions.

Despite the apparent problems in the industry, Cullen poured cold water on prior attempts to peg a precise price increase on homes due to money laundering.

While his executive summary states, “money laundering is not the cause of housing unaffordability,” he clarifies within the report that he examined whether it is “the” cause or “a main” cause — as it may be perceived publicly. Cullen found no such proof but nevertheless concluded the real estate sector is vulnerable.

Cullen said the reasons for increases in housing costs “are many, and they are complicated.” He cites housing supply and demand and interest rates as more proven factors.

Cullen examined the 2019 expert panel report of professors Maureen Maloney, Tsur Somerville, and Brigitte Unger titled Combatting Money Laundering in BC Real Estate, which did prescribe a figure for money laundering in real estate — about a 3.7% to 7.5% increase in prices. But Cullen noted that the estimate came with caveats and uncertainties. The model the panel used was “an exercise in speculation and, ultimately, guesswork,” said Cullen.

Cullen took time to separate what he perceives as a common mistake in the public discourse — that foreign investment and money laundering go hand in hand.

Cullen relied on the Canada Mortgage Housing Corporation’s conclusion foreign investment was not a significant driver of real estate prices in Vancouver, based on home ownership data from 2010-2016.

He noted, however, that defining foreign investment can be difficult and “witnesses disagreed about whether foreign investment plays a significant role in Vancouver’s housing prices.”

Simon Fraser University professor Joshua Gordon and University of B.C. professor emeritus David Ley testified how foreign capital can explain the decoupling of local incomes to home prices in B.C. However, such capital may not show up as direct foreign investment in home ownership data; instead, it is foreign money transferred into homes owned by newly established residents or via beneficial ownership structures that can obscure the real picture.

“It became clear as the evidence developed before me that there is disagreement in the academic community about what should be considered ‘foreign ownership.’ Is it limited to beneficial ownership by persons or entities based or resident outside Canada? Or does it extend to purchases made largely with funds earned outside of Canada?” asked Cullen, to which he replied to his questions that “resolving these complex issues is somewhat outside the ambit of my mandate.”

Cullen noted Gordon’s position that it is difficult to determine the origins of foreign capital and, with respect to China, the money being transferred is often escaping capital export controls set by the Chinese government.

He dispelled the notion that foreign investment, particularly from China, is money laundering. And Cullen expressed concern that, in his view, public discourse had reached such a conclusion.

Cullen noted racist stereotyping of investments in real estate originating from China, as University of B.C. professor Henry Yu testified to, must be weeded out from “legitimate policy questions relating to foreign ownership of real estate in the province.”

Cullen concluded that he could make no conclusive finding on money laundering or foreign investment, however defined, is a “primary cause” of home price increases in B.C. and steps to address money laundering should not be viewed as a “panacea for housing unaffordability.”

Ultimately, more study is required on the matter, concluded Cullen.

Ron Usher, general counsel for the Society of Notaries Public, said the conclusions may frustrate some members of the public, however they are not surprising given it is difficult to track money laundering.

“I think people were understandably very interested in that. But I think it’s appropriate for him to say, ‘We just don’t have information.’ Well, of course, we don’t because, you know, people don’t tick a box on a form saying, ‘I got this money from money laundering or a predicate crime,'” said Usher, who followed the daily testimony over two years as an intervenor.

Recommendations run deep into real estate sector

Despite not finding answers to such a significant question in the public discourse over the past 10 years, Cullen lays bare 40 recommendations for the real estate industry, now regulated by the 2021-established B.C. Financial Services Authority (BCFSA).

His recommendations suggest that real estate licensees are largely uneducated on AML measures and that both managing brokers and sub-brokers require education “focusing on the detection and reporting of fraud and money laundering in the industry.”

Cullen also recommends the BCFSA, a government regulator, put in place measures for better data collection and that it implores real estate licensees and notaries to record source of funds information should the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) not do so on a federal level. He also wants BCFSA to mandate AML programs at each brokerage as a licensing condition.

Seventeen recommendations directly relate to mortgage brokers, who are overseen by the Registrar of Mortgage Brokers within the BCFSA.

Cullen wants brokers to have extended criminal record checks and more clearly defined responsibilities, including new reporting mandates under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Cullen also recommends all legal owners of mortgage charges are reported and that this information be available through the public land titles registry of the Land Title and Survey Authority. Presently, one is unable to conclusively determine, from flings, all of the owners of a registered mortgage charge.

Cullen is also calling for greater penalties and repayment of profits from proven unscrupulous brokers.

As for real estate licensees, Cullen has recommended employees of developers be brought within the licensing scheme. Today, many developer representatives effectively sell homes (“pre-sale” units) without any regulatory oversight.

Cullen also identified some legal matters to resolve, such as how courts cannot refuse to enforce debts made with funds of suspicious origin. As such, he recommends a source of funds declaration in foreclosure proceedings, at the judge’s discretion. This recommendation stems from Cullen’s examination of numerous foreclosure filings by alleged money launderer and casino cash provider Paul Jin.

Meanwhile, sunshine policies are a prominent set of recommendation for Cullen, namely by populating the B.C.’s Land Owner Transparency Registry with historic data within three years. He also recommends the Land Title and Survey Authority have a clear and enduring AML mandate, including the ability to “more readily” share data with other agencies.

Finally, with all such measures, Cullen recommends the Ministry of Finance analyze how such changes may impact housing prices.

Cullen thirsty for more data

Cullen emphasizes in his report the need for a beneficial ownership registry for both real estate and corporations, with the latter requiring a pan-Canadian approach. Contrary to some witnesses he heard from, such as journalists and Transparency International Canada, Cullen says a small search fee ($5) for beneficial ownership land titles is acceptable if government deems it so for operational purposes. However, Cullen suggests no such fees exist for a beneficial ownership registry of corporations. No fees should apply to law enforcement and regulators, noted Cullen.

With respect to data, Usher said tools such as land title registries, which are “secure and reliable,” are increasingly being used by government agencies. He said Canada Revenue Agency could more easily track land purchases these days to weed out tax evasion and money laundering.

“It’s easy to come up with lots of rules,” said Usher.

“What we really need is a formal process of a notice of acquisition of real estate for CRA and a notice of disposition of real estate for CRA for every transaction.

“We need to get the right information from the right people at the right time,” said Usher.

gwood@glaciermedia.ca

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MiB: Jonathan Miller on Residential Real Estate – The Big Picture – Barry Ritholtz

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This week, we speak with Jonathan Miller, who is CEO and co-founder of the real estate appraisal and consulting firm Miller Samuel. He is an adjunct associate professor at Columbia University’s graduate school of architecture and planning. he also serves on the Mayor’s Economic Advisory panel and the New York State Budget Division Economic Advisory Board. His research and analytics powers the back end of some of the larger real estate brokerage firms.

We discuss the pullback in real estate demand due to rates almost doubling; contact volume is down, and has been trending that way since March. The collapse in inventory is also to blame, as has the fall in affordability.

During most real estate slowdowns, sales activity slows immediately, as inventory rises. But prices tend to take a few years to reflect the new market, awaiting seller capitulation. Miller hopes we might see a faster adjustment given the recent big runup in home equity.

He also explains why it is so challenging to convert urban office towers into residential buildings. Big cities like New York and San Francisco find themselves with a surplus of office buildings that are running about 2/3rds empty, while there are acute shortages of residences at most price points.

A list of his favorite books is here; A transcript of our conversation is available here this week.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week Perth Tolle with founder of Life + Liberty Indexes, index provider and sponsor of the Freedom 100 Emerging Markets ETF. The first-of-its-kind strategy uses personal and economic freedom metrics as the primary factors in its investment process. Prior to forming Life + Liberty Indexes, Perth was a private wealth advisor at Fidelity Investments in Los Angeles and Houston and had lived and worked in Beijing and Hong Kong, where her observations led her to explore the relationship between freedom and markets.

Jonathan Miller Favorite Books

Fins: Harley Earl, the Rise of General Motors, and the Glory Days of Detroit by William Knoedelseder

The Reckoning by David Halberstam

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