Steve Baldwin

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Market Update September 2011

Consistent increases in property listings and fewer home sales over the summer months has helped move the Greater Vancouver housing market into the upper end of a buyers’ market, but remains relatively balanced.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales (units) of detached, attached and apartment properties on the region’s MLS® increased 1.2% in September, compared to September 2010. Those sales rank as the third lowest total for September over the last 10 years.

“There's more competition amongst home sellers in today's market, providing more options for prospective buyers," Rosario Setticasi, REBGV president said "Buyers now have more properties to choose from and more time to make decisions compared to the spring season.” However there are a few exceptions in some areas and home types; Vancouver Westside, Richmond and West Vancouver detached properties.

New listings for detached, attached and apartment properties in Greater Vancouver for September, is the third highest volume for September in 17 years. This represents a 20.1% increase compared to September 2010 and a 21% increase compared to August 2011.

The number of properties listed for sale on the Greater Vancouver MLS® has increased each month since the beginning of the year. Listings on the MLS® increased 4.6% in September compared to August 2011 and rose 4.4% compared to this time last year.

“Our sales-to-active-listing ratio currently sits at 14%, which is the lowest it’s been this year. Generally analysts say that a buyer’s market takes shape when the ratio dips to about 12 to 14%, or lower, for a sustained period of time,” Setticasi said. Again this is trend is not reflected in all sub areas of Greater Vancouver *.

The Housing Price Index (HPI) benchmark (average) price for all residential properties in Greater Vancouver over the last 12 months has increased 8.8% to $627,994 in September 2011 from $577,174 in September 2010.

Examples:                                Detached                      Attached                       Apt./Condo

*Vancouver Westside                $2,030,720 +24.5%        $841,990 +9.5%            $526,026 +5.8%

*North Vancouver               $973,469 +11.1%           $617,579 +0.4%            $377,261 -1.6%

*West Vancouver               $1,716,247 +18.9%        not sufficient data         $733,981 +15.8%

*Burnaby                       $949,389 +23.1%           $501,257 +3.4%            $370,244 +5.5%

*Coquitlam                                $725,525 +3.2%            $473,694 +8.1%            $289,924 -0.9%

Since reaching a peak in June of $630,921, the average price for all residential properties in the region has declined 0.5 per cent.

Sales (units) of detached (single family) properties increased 10.5% from September 2010. The benchmark price for detached properties increased 13.4% from September 2010 to $896,701.

                                                                                                                                                ….2

 

 

Sales (units) of apartment/condo properties decreased 5% compared to September 2010. The benchmark price of an apartment property increased 4.4% from September 2010 to $405,569.

Attached property (duplex / townhomes) sales (units) in September 2011 decreased 4.2% compared to September 2010. The benchmark price of an attached unit increased 5.4% between September 2010 and 2011 to $516,697.

The Bank of Canada Rate remains unchanged at 3% and both variable and fixed mortgage interest rates continue to be at historical lows. The fragile health of our Canadian economy and the acceptable Consumer Index inflation rate continues to support the Government’s monetary policy. Greater Vancouver enjoys a stable economy and a continued influx of new residents both domestic and international. The current easing of upward pressure on home prices is good for all participating in home ownership and renews opportunity for those wishing to engage home ownership.

If your not a real estate speculator and committed to home ownership on a medium or long term basis then if it’s the “perfect” home and purchased at  a fair prevailing market price, anytime is a good time to invest in a home! As history shows (see the attached graph) the market will pay dividends!

Please call or e-mail me with any questions with regard to this report or any other real estate topics that interest you!

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Why could I get Prime - 0.90% last week and today it is Prime - 0.25%? 

A great question, says the Mortgage Broker Association of BC (MBABC), especially when fixed interest rates are remaining the same. The quick answer? As with many things, it all boils down to money.

Over the last couple of months, banks and other lenders have been offering historically low variable rates to qualified homebuyers in an effort to attract new clients and mortgage business. In the short term, lenders have been prepared to accept these low profit margins with the knowledge that, as the prime rate inevitably rises, so too will their profit on variable mortgages - a similar 'loss leader' tactic used by retailers to get consumers into their door.

"However", says Geoff Parkin, MBABC's president, "the recent announcement by Bank of Canada governor, Mark Carney has changed the mortgage lending landscape." Carney stated that, because of poor performing global markets and continuing economic uncertainty, the benchmark interest rate would remain unchanged. The long-term outlook indicated continuing low fixed interest rates with no significant increases to the Prime rate. "In a nutshell", says Parkin, "the bank's theory of anticipating rising profits on variable rates was proven wrong. They've had to quickly respond to this situation by reducing the variable rate discount in order to gain back profit."

What does this mean for consumers who have variable rate mortgages? Much of the same, says Parkin. "We continue to see low fixed rates and the variable rate is under 3.0%. There may still be value in going variable over fixed, but because consumers all have different financial situations and mortgage needs, we recommend they obtain expert financial advice from their MBABC mortgage broker."     
An Interest-Saving Meal Plan

47% of Canadians say eating out less would help them save more.

Sounds logical. Frequent diners can drop $100+ a pop at a decent restaurant. But what if that same $100 was redeployed, once a month, as a mortgage prepayment?

The result is appetizing in its own right. A standard $200,000 mortgage is paid down 13% quicker - in just 21.75 years instead of 25 years.

Of course, once you pay off the mortgage you can take your payments savings and eat out 10 times a month if you really want to...or not.

Source: ING Direct Poll
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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.