Survey shows consumer sentiment divided

VANCOUVER, BRITISH COLUMBIA, Mar 28, 2012 (MARKETWIRE via COMTEX) -- The REW.ca Real Estate Consumer Confidence Survey reveals a close split on whether this spring is a good time to buy in Vancouver Lower Mainland. According to the survey, 46% of Vancouver Lower Mainland residents think it's a good time to buy in the next three months, while a close 42% disagree.

Traditionally, spring is the busiest season for buying and selling houses, but this year, record-low interest rates line up against record-high prices, leaving consumers wondering where the market will go. Of the 46% who believe it's a good time to buy, 28% gave low interest rates as the main reason, with 17% saying it's a buyer's market with a lot of inventory available. Half of those who don't think it's a good time to buy cite high prices (49%), and 17% of them see a housing bubble and expect a market correction with falling prices.

Meanwhile, a 56% majority of respondents believe now is a good time to sell a house or condo in the Vancouver real estate market. Of this group, 18% cite high prices as the reason to sell this spring, and 17% believe there will be a market correction that will result in dropping prices.

Consumer uncertainty is reflected in this year's sales figures. In both Greater Vancouver and the Fraser Valley, sales are below the 10-year average so far.

"Our surveys are a way to find out what consumers are thinking about real estate here in Vancouver and really add to the market expert viewpoints," says Ian Martin, General Manager, REW.ca. "Our spring survey findings highlight the duality of opinions between buying now or waiting. On one hand you have potential home buyers seeing the low mortgage interest rates as a good opportunity to buy now. On the other hand you have those who believe we're due for a housing price correction."

Survey Highlights

See complete survey results at http://www.rew.ca/articles/good-time-to-buy-our-consumer-survey-241/

"Do you think it is a good time to buy a house or condo in the next 3 months?"

--  46% Yes, 42% No --  Top reasons it is a good time to buy (for 46% "yes" group): --  28% say interest rates are low --  17% say it is a buyer's market/many properties for sale --  13% say prices will continue to rise --  Top reasons it is not a good time to buy (for 42% "no" group): --  49% say prices are high --  17% say prices will come down --  15% say they are concerned about the economy

"Do you think it is a good time to sell a house or a condo in the next 3 months?"

--  56% Yes, 33% No --  Top reasons it is a good time to sell are (for 56% "yes" group): --  18% say prices are high --  17% say that prices will go down/market correction/housing bubble --  14% say it is a good time of year to sell --  Top reasons it is not a good time to sell are (for 56% "yes" group): --  29% say prices will go down/market correction/housing bubble --  19% say they are concerned about the economy --  13% say it's a buyer's market/too many properties for sale

More information about the survey

The complete survey charts are available - click here. The survey was sponsored by REW.ca and conducted by Mustel Research Group. This REW.ca survey is part of a regular series of polls focused on local residents' behaviours and beliefs. These survey findings provide additional views of the real estate market, beyond the analysts and economists. There were 278 interviews completed with Metro Vancouver and Fraser Valley residents, 18 years of age or over. Both renters and owners were surveyed. The regions included in the survey are:

--  City of Vancouver --  North Shore --  Burnaby/New Westminster --  Tri-Cities/Maple Ridge/Pitt Meadows --  Richmond/Delta --  Surrey/North Delta east to Aldergrove --  Abbotsford/Chilliwack

OTTAWA — The Canadian housing market is off to a strong start this year, with gains in sales and prices in most major markets, according to a report released Thursday from real-estate company Re/Max.

It said sales for January and February were up in 12 of the 15 markets it assessed compared to a year earlier, most by 10 per cent or more. It credited low mortgage rates, strong consumer confidence and even some mild weather, which it said helped usher in an early spring buying season.

"Given the current economic climate, the strength of the country's housing market clearly reflects the value Canadians place on home ownership," Michael Polzler, an executive vice-president with Re/Max, said in a statement.

"One driving factor has been the overall performance of the market over the past decade. Existing homeowners have realized substantial equity gains, especially in recent years, and many are taking advantage of the combination of historically low interest rates and equity to upgrade."

Prices were up in 14 of the 15 markets analyzed, but just three — the Greater Toronto Area, Winnipeg and St. John's — broke the double-digit mark, each with gains of 10 per cent, Re/Max said.

Vancouver-area sales were down 16 per cent in the early part of the year, joining Winnipeg and Kitcherner-Wateloo, Ont., as the only spots where sales were down from one year earlier, Re/Max said. Still, Vancouver had the highest average sales price of any market, at $786,695, up 0.1 per cent from last year.

The average price in the Toronto area was $487,254, and Re/Max said about half the detached homes there in the price range of $600,000 to $900,000 have sold for more than their listed price.

Postmedia News

Canada housing 10-15 pct over-valued

As of Feb. 29, 2012, there were 6,000-plus condos for sale through the Vancouver Real Estate Board - up 15 per cent compared to the previous year.

At the same time, sales of used condos were down by 18 per cent. The average price of $457,000 was slightly higher than last year.

Add to this the fact that - according to MPC Intelligence - there are some 8,000 pre-sale condos being launched in the first six months of this year. Buyers should draw up a checklist, do some comparisons and keep in mind the following tips:

. Buy a good location in the building. Choose your suite wisely - not over a garage door or entrance. Not near a garbage can. Buy corner units, particularly in a townhouse complex. Buy the top floor in three-storey building. Buy balconies. Buy view.

. Buy a building where you can rent out the suite. In B.C., councils can vote tenants out. In many parts of Canada, councils have that power too. What about pets, age, children restriction?

. Read the minutes of the strata for the last two years. If you can't - get someone who can. Watch for "lawsuit pending," "building envelope study commissioned," etc.

Pay attention to anything with the word "legal" in it. Leaking by itself may not be the problem, but you need to know what the council did about it.

. Buy cubic volume - not only square feet (for example, in lofts). Buy height in expensive suites.

. If you buy out of town for investment ... make sure that heat is not included in rent.

. Have good property management ... it will make or break you. . Get a tenant package insurance. Understand all strata, heating, water, garbage fees. Check insurance claim record of building.

. Talk to a member of the strata council and/or the property man-ager and ask him about what kind of people live in the building.

According to the Real Estate Board of Greater Vancouver (REBGV), MLS home sales last month were up more than 60 per cent from January. Not surprisingly, they were down nearly 18 per cent from last February, when the market was smoking hot. Overall, the market is balanced as we move into what is traditionally the busiest part of the year.

REBGV president Rosario Setticasi summed it up saying, "Region-wide we've seen relative stability in home prices over the last six months, but it's important to do your homework and consult your realtor because pricing can vary considerably depending on the neighbourhood and property type."

Ms. Setticasi could be referring to sales activity in the East Vancouver single family housing market. Over the past few months buyers seeking affordable housing appear to have migrated from the West Side to the East Side and that's been driving house prices up.

On the street, we're seeing lots of multiple offers, particularly along the Main Street corridor with most of the action between Quebec and Fraser from East 12th to East 33rd. As a result, many of those homes are selling well above asking price.

So, we may be in a buyers market, with more supply and relatively stable prices, but in pockets of East Vancouver, the market's hot. CMHC stats show that there's only a three month supply of single family houses in East Van. I expect that this is due in part to the Vancouver Park Board's excellent initiatives to build on the work done for the 2010 Olympics to create top notch community and recreational facilities in the area.

On the West Side, prices are trending flat or slightly down so make sure you do some comparison shopping on both sides of Main. If you're looking for a starter house, check out the low end of the Kitsilano market.

On the economic front, CMHC is predicting strong fundamentals with historically low mortgage interest rates, increased employment and a steady stream of new residents moving to B.C. In response to projected income growth and subsequent home ownership demand, B.C.'s homebuilders are expected to ramp up residential construction.

That means that there'll be a lot of new housing out there trying to attract buyers which might explain some of the activity in Victoria over the past couple of weeks. After introducing a time-line for phasing out HST, and in the meantime increasing the threshold for eligibility for the HST rebate to $850,000, the B.C. government took a break from sticking it to the teachers and found some cash for a First-Time New Home Buyers' Bonus.

This is good news for new entrants to the market. It's basically a tax credit. If your net family income is less than $150,000, your bonus or tax credit is five per cent of the purchase price of a new home to a maximum of $10,000. The rebate is reduced to zero at $250,000 in net family income ($200,000 for an individual).

You can qualify when you buy or build a new home in B.C. if you and your spouse or common-law partner have never owned a primary residence anywhere in the world. You have to be eligible for the B.C. HST New Housing Rebate and you have to plan to live in the home as your principal residence.

Eligible new homes will include detached houses, semi-detached houses, duplexes, townhouses and condos [including new coop housing units], mobile homes and floating homes. This appears to be a time-limited offer. Buyers have to take possession of their new home before April 1, 2013, six weeks before the next provincial election.

REBGV February Stats Videocast

But 2013 will see slight upward shift

The number of Canadian homes sold this year will outpace 2011 while prices will hold steady in most parts of the country, the country's largest real estate association said Monday in a rosy revision to its 2012 outlook.

The Canadian Real Estate Association said the number of home sales will grow by 0.3 per cent this year to 458,800 from 457,305 units in 2011, largely due to the continuation of low borrowing rates.

The national average price is forecast to dip by 1.1 per cent in 2012 to $359,100 but that's due to a drop-off in multi-million dollar sales activity in Vancouver —Canada's most expensive real estate market..

Prices are expected to remain around current levels in most parts of the country, CREA said.

The most recent forecasts reversed those CREA gave in November, when it expected home sales to fall by 0.5 per cent this year, and the national average home price to hold steady at $362,700.

The revisions come at a time when central banks in Canada and the United States are keeping their key lending rates low to counter the economic drag caused by the European debt crisis.

"Risks to the Canadian economic outlook remain elevated owing to the European sovereign debt quagmire, but the continuation of low interest rates is the silver lining," CREA chief economist Gregory Klump said.

"So long as the European debt crisis is contained and a global economic recession avoided, low interest rates will support Canadian home sales and prices."

CIBC economist Benjamin Tal said the new CREA forecast is much more in line with what he is projecting, and if anything it is "a best case scenario" forecast, with his bias being toward an expectation of more significant price declines.

"This is basically a stagnating housing market," Tal said.

"This is not a housing market that is going to be on fire. This is a housing market that you'll see activity moderating and prices actually going down."

CREA expects Alberta, Saskatchewan, and Nova Scotia will drive the sales growth this year, offsetting weakness in British Columbia, Ontario, and New Brunswick.

In Vancouver, prices are already falling from sky high levels a year ago, especially in the once bustling condominium market, and prices elsewhere in country are not rising significantly to offset those big declines, Tal noted.

By contrast, sales and prices are still moving higher in Toronto, with sales up 16 per cent from last February and prices up 11 per cent.

However, a stagnating market is "exactly what we need to see" over the next few years to avoid a housing bubble that could burst, Tal noted.

"I think even real estate agents will tell you that another year of crazy activity with house prices rising by 10 per cent would not be good for their business from a long-term perspective."

Sales are now expected to pull back by 0.3 per cent to 457,200 units in 2013, with prices rising 0.9 per cent to a national average of $362,300, CREA said.

Ontario is expected to weigh down the national results, as it is the only province not expected to make "modest gains," CREA said.

The outlook would put national sales activity on par with the 10-year average for annual activity, the agency noted.

The Bank of Canada and some economists have warned that Canadians are piling on too much mortgage debt while interest rates are low, and some may no longer be able to afford their homes when interest rates rise.

One paper issued by the central bank suggested that home prices have been influenced not only by low mortgage rates but also on expectations that values will keep rising.

Meanwhile, CREA's Klump has steadfastly declared Canada's housing market is healthy, and is more likely in for what he calls a "soft landing."

"Recent trends are reassuring, but interest rates remaining low for longer will doubtless keep the Canadian housing market under scrutiny for signs of overheating," Klump said.

Tal believes that if there is a reacceleration of activity, the federal government would step in again with new mortgage rules to curb activity. Meanwhile, the central bank is unlikely to raise interest rates to soften the market because it is too broad of a tool that could hit other sectors hard.

"The real measure of intelligence is what you do when you don't know what to do," Tal said.

"And what you do when you don' you don't take chances so this fog of uncertainty will prevent it from switching policy any time soon."

Greater Vancouver housing market trends near long-term averages as spring market approaches

Closer alignment between home buyer and seller activity helped bring greater balance to the Greater Vancouver housing market in February.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,545 on the MLS® system in February 2012. This represents a 61.4 per cent increase compared to the 1,577 sales recorded in January 2012, a decline of 17.8 per cent compared to the 3,097 sales in February 2011 and a 2.9 per cent increase from the 2,473 home sales in February 2010.

February sales in Greater Vancouver were the third lowest February total in the region since 2002, though only 151 sales below the 10-year average.

“With a sales-to-active-listings ratio of over 18 per cent, we see fairly balanced conditions in our marketplace as we move into the traditionally busier spring season,” Rosario Setticasi, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,552 in February 2012. This represents a 2.5 per cent decline compared to February 2011 when 5,693 properties were listed, and a 3.5 per cent decline compared to January 2012 when 5,756 homes were added to the MLS® in Greater Vancouver.

Last month’s new listing count was the second highest February total in Greater Vancouver since 1996.

At 14,055, the total number of residential property listings on the MLS® increased 12 per cent in February compared to last month and increased 17.9 per cent from this time last year.

“Region-wide we’ve seen relative stability in home prices over the last six months, but it’s important to do your homework and consult your REALTOR® because pricing can vary considerably depending on the neighbourhood and property type,” Setticasi said.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $670,900, up 6 per cent compared to February 2011 and an increase of 0.9 per cent compared to January 2012. The benchmark price for all residential properties in the Lower Mainland is $601,300, an increase of 5.5 per cent compared to February 2011.

Sales of detached properties on the MLS® in February 2012 reached 1,101, a decline of 21.5 per cent from the 1,402 detached sales recorded in February 2011, and a 12 per cent increase from the 983 units sold in February 2010. The benchmark price for detached properties increased 10.5 per cent from February 2011 to $1,042,900.

Sales of apartment properties reached 1,020 in February 2012, a decline of 15.4 per cent compared to the 1,206 sales in February 2011, and a decrease of 5 per cent compared to the 1,074 sales in February 2010. The benchmark price of an apartment property increased 2.8 per cent from February 2011 to $373,300.

Townhome property sales in February 2012 totalled 424, a decline of 13.3 per cent compared to the 489 sales in February 2011, and a 1.9 per cent increase from the 416 townhome properties sold in February 2010. The benchmark price of a townhome unit increased 0.7 per cent between February 2011 and 2012 to $472,800.