Bibliblography

Booms, Busts, and Bubbles

2010-02-04T21:47:00.000-08:00

Historically, house prices in Vancouver grew less than other Canadian cities from the years 1997 to 2004. It comes to no surprise that housing prices in Vancouver are the highest in Canada since Vancouver is ranked one of the best places to live in the world. Thirty years ago, three distinct cycles of housing prices in Vancouver took place. The first cycle occurred in 1979 to 1981 where the price of a house in Vancouver increased by 119%. The second cycle had an increase of 69% from 1986 to 1990. The final third cycle happened in the year 1994 where house prices rose 38%. A valuable feature to note is that they are cyclical. This can be found by looking at the price history of Vancouver houses. Interest rates, personal income and employment, and migration are some of several factors which influence the changes in house prices.

http://www.sauder.ubc.ca/AM/Template.cfm?Section=Strategy_and_Business_Economics_SBE_&Template=/CM/ContentDisplay.cfm&ContentID=13934

B.C. real estate 2009 bounce-back to taper off this year, 2011

2010-02-03T22:48:00.001-08:00

Cameron Muir, an association chief economist, says house sales in the province are predicted to increase about 3% in 2010 to 90, 100 sales from last year then back down 3% the following year in 2011 to 87, 500 sales. The provincial average price for the next two years is forecasted to be $490, 900 in 2010 and $494, 800 in 2011. For the average customer, it will be more expensive for them to purchase a home later in the year as mortgage rates are expected to rise, therefore driving up the housing cost and demand. Since the growth of employment and income is not rising as quickly as housing prices are, record sales levels are not expected to occur this year. But home sales in the next two years are expected to be slightly above the 10-year annual average. Muir also forecasts sales in Metro Vancouver to increase 3%, 37, 500 units in 2010 and slip down 5% the following year to 35, 500 units in 2011. In addition, Metro Vancouver average price will increase to about $636, 000 in 2010, then drop to $643, 000 in 2011.

http://www.vancouversun.com/business/real-estate/real+estate+2009+bounce+back+taper+this+year+2011/2500826/story.html

Bank of Canada won't raise interest rates to cool housing

2010-02-02T23:24:00.000-08:00

Some people fear that at the rate people are purchasing homes with the current interest rates will eventually lead to a bubble, infaltion of house prices, once interest rates begin to rise. These individuals believe now is the right time to alleviate house market activity. Per contra, the Bank of Canada decided not to raise but keep the current interest rates. Mr. Lane, a representative from Bank of Canada, mentions that lending rate is used to keep inflation in check and the housing market contributes as one of several other factors that influence inflation. He suggests other methods that could cool down the housing market such as having the government make decisions on increasing capital requirements for lending institutions, adjust loan to value ratios, or change the terms and conditions required to obtain mandatory mortgage insurance. Finance Minister Jim Flaherty responds they have the necessary tools to deal with the bubble if any indications of it are evident. These tools include insured mortgages, lending standards, amortization periods and down payments, similar to how the recession of 2008 was handled.

http://www.theglobeandmail.com/report-on-business/bank-of-canada-wont-raise-interest-rates-to-cool-housing/article1427298/

Housing Market Outlook

2010-02-02T20:22:00.001-08:00

Home sales will gradually increase over the next year or two but remain below levels recorded in recent years. Population growth, improving job market, and low mortgage rates will cause demand to return to the real estate market in 2010. The recovery sales that occurred in the spring and summer seasons in 2009 will carry on in 2010. During this period, low home prices and low mortgage rates are key ingredients that drove up home sales, thus affordable for home buyers. Despite the fact that home prices are continually rising, low mortgage rates will keep buyers active through the first half of 2010. Homes sales may be below average for the first quarter of 2010 as transportation route changes for the winter Olympic Games. Home prices are expected to trend up by 2% to 4%. Migration to the city, improvement in the economy, and low mortgage rates will encourage and increase demand for new homes in 2010. An increase of 35, 000 people annually will translate into 16, 000 households in need of homes. Beginning of 2009, the mortgage rate was 1.50% but has declined to 0.25%. The Bank of Canada announced they will keep this rate until mid 2010 unless there is an increase in inflation.

https://www03.cmhc-schl.gc.ca/catalog/productDetail.cfm?csid=1&cat=114&itm=3&lang=en&fr=1265014540810

Greater Vancouver real-estate prices end year on high note

2010-02-01T20:42:00.000-08:00

RE/MAX, an international real estate company that provides professional services to home buyers and sellers, reports a 45% increase in sales in Greater Vancouver in 2009. The total number of homes sold is 36, 500, up from 25, 149 last year. In 2010, the estimated average house price in Greater Vancouver is estimated to be $640, 000 which is the highest ever in Canada with a national average of $325, 000. In March of 2009, the housing market in Vancouver reached its bottom at the price of $530, 573. Low interest rate is one major contributor and continues to be a strong motivator resulting in a high level of demand in the housing market. In November 2009, sales totaled 3, 083 in Greater Vancouver compared to 874 sales in November 2008, an increase of 252.7%. Both sales and listing activity are usually low in the month of November as the holidays are approaching around the corner. However, listings were down in numbers except for sales as recorded by the Fraser Valley Real Estate Board last November of 2009. According to Paul Penner, president of the Fraser Valley Real Estate Board, this was the “second busiest November Fraser Valley realtors have seen in 10 years.” Again, low interest rates may be the key motivator that causes demand and price to rise.

http://www.theprovince.com/business/Greater+Vancouver+real+estate+prices+year+high+note/2300193/story.html

The Vancouver house price rip-o : Who's to blame

2010-01-31T23:41:00.000-08:00

The housing market sector in Britain, Ireland, New Zealand, Australia and the United States plunged deeply as they were strongly affected by the recession than it did in Vancouver. As of January 2010, Vancouver is at the top of the list of the least affordable housing of 300 metropolitan markets worldwide. In general, “median house price should be no more than three times the median income” in order for the housing market in a city to be considered affordable. In this case, Vancouver falls under the category “severely unaffordable” with a median house price and household income of $540, 000 and $58, 200, respectively. Another reason why house prices are so high in Vancouver is that governments are enforcing taxes, fees, levies, and restrictive land use policies. For example, there are the property charges, sewage and drainage levies, school site acquisition fee, and other miscellaneous charges. More land can be made available if more sensible land use policies are used. For a 33-foot vacant lot on Vancouver’s west side, the cost is about $1 million, $285, 000 for Coquitlam, and for Surrey it costs $230, 000. On average, the cost of building the house is $300 per square foot in Vancouver compared to Portland, $75 a square foot.

http://www.vancouversun.com/business/Vancouver+house+price+blame/2503550/story.html

$675 a month in Vancouver for ...

2010-01-31T19:15:00.000-08:00

Potential buyers can rent these micro-lofts at a monthly rent starting at $675 which are near transit, shopping malls, and restaurants. The micro-lofts are 270 square feet, similar to the size of a small single-car garage. This may seem to be small but last year Vancouver condominium owners were granted a bylaw that allowed them to rent portions of their homes to others, minimum size of 195 square feet. The refurbished heritage building is known as Burns Block, located on Hastings Street. Four years ago, dozens were forced to move as it was uninhabitable and has been empty ever since. Burns Block’s neighbor, Portland Hotel, is a non-profit residence that accommodates drug addicts and people that are sick. With many complaints about the surrounding area, private firms are helping out to change the neighbourhood. Doug MacFarlane describes that each micro-loft will have “built-in features such as a fold-up bed, and a tiny bathroom with a showerhead installed directly over the toilet.” The 30 micro-lofts project is expected to be completed sometime in March 2011 with an estimated cost of six million dollars.

http://www.nationalpost.com/news/story.html?id=2484089

Vancouver has world's least affordable housing: report

2010-01-31T17:58:00.000-08:00

According to the Demographia International report, Vancouver was reported to be the world’s least affordable places to live last year. In Canada, the five least affordable cities are Vancouver, Victoria, Abbotsford, Kelowna, and Toronto. Four out of the five cities were in British Columbia. On the other hand, the five most affordable places to live in Canada are Thunder Bay and Windsor, Moncton, Saguenay, and Saint John. Vancouver and Toronto fell in the category of being the "severely unaffordable" market in Canada. The authors of the report ranked the cities by taking the median residential house values and dividing it by median annual gross household incomes from the third quarter of 2009. However, there have been some criticisms on the report. Brent Gilour, CEO of the Canadian Urban Institute, states that the report “oversimplifies other factors that affect housing affordability, such as regional real estate markets and economic conditions.”

http://www.cbc.ca/consumer/story/2010/01/26/consumer-home-affordability.html#socialcomments

In Vancouver, house prices on a tear

2010-01-31T15:11:00.000-08:00

House prices in Vancouver are being sold for hundreds of thousands above asking price within days after being listed. One of the main reasons is that buyers are tired of being out bid by others. Thus, buyers are bidding a lot more to settle the deal compared to $100,000 above asking back in spring of 2009. During the summer season of 2009, hot properties were the only houses that captured a lot of bidders. Now, bidders are bidding on houses such as Vancouver Special which wasn’t the case back in winter of 2009. People are taking advantage of low interest and mortgage rates causing an overwhelming number of bidders. This is causing the house prices to be overpriced. A lot of people now regret that they should have purchased a home back in the winter of 2008 when the economic crises occurred. The trend of 2010 seems to be similar to last year where not many listings occur during the winter and holiday season. However, realtors predict that after the Olympics and at the beginning of spring season is when listings and bidding wars will commence once again.

http://www.theglobeandmail.com/real-estate/in-vancouver-house-prices-on-a-tear/article1370210/