VANCOUVER – After beginning the year at near record low sales levels, buyers’ confidence in the Greater Vancouver housing market quickly returned, allowing for significant and sustained increases in the number of residential property sales for much of 2009.
The Real Estate Board of Greater Vancouver (REBGV) reports that total unit sales of detached, attached and apartment properties in 2009 reached 35,669, a 44.8 per cent increase from the 24,626 unit sales recorded in 2008, but a 6.3 per cent decline from the 38,050 residential sales in 2007.
The number of homes listed for sale on the Multiple Listing Service® (MLS®) in Greater Vancouver declined 15.5 per cent in 2009 to 52,869 compared to the 62,561 properties listed in 2008.
“Low interest rates, an economy emerging from recession and continuing to improve, and consumer confidence led to the resurgence experienced in the Greater Vancouver housing market in 2009,” Scott Russell, REBGV president said. “Home sales neared or passed monthly records in Greater Vancouver throughout the latter half of 2009. In fact, last month’s home sales rank as the third highest selling December in the 90-year history of our organization.”
Residential property sales in Greater Vancouver totalled 2,515 in December 2009, an increase of 172.2 per cent from the 924 sales recorded in December 2008, and an 18.4 per cent decline compared to November 2009 when 3,083 home sales occurred.
The residential benchmark price, as calculated by the MLSLink Housing Price Index®, for Greater Vancouver increased 16.2 per cent to $562,463 between Decembers 2008 and 2009.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 2,153 in December 2009. This represents a 38.9 per cent increase compared to the 1,550 new units listed in December 2008 and a 41.1 per cent decline compared to November 2009 when 3,653 properties were listed.
“The number of homes listed for sale on our MLS® has been in decline in Greater Vancouver for eight of the last nine months, which results in upward pressure on home prices and less selection for buyers to choose from,” Russell said.
Total active listings in Greater Vancouver currently sit at 8,939, a decrease of 41 per cent from December 2008, and a decrease of 19 per cent from November 2009.
Sales of detached properties in December 2009 increased 159.2 per cent to 902, compared to 348 sales in December 2008. The benchmark price for detached properties increased 18.3 per cent to $766,816 compared to December 2008.
Sales of apartment properties in December 2009 increased 176.7 per cent to 1,154, compared to 417 sales in December 2008. The benchmark price of an apartment property increased 14.8 per cent since December 2008 to $382,573.
Attached property sales in December 2009 increased 188.7 per cent to 459, compared with the 159 sales in December 2008. The benchmark price of an attached unit increased 12.9 per cent between Decembers 2008 and 2009 to $478,093.
Tuesday, January 12, 2010
Bank of Canada sees no housing bubble yet
OTTAWA -- The Bank of Canada Monday dismissed talk of a housing bubble in Canada as "premature," warning that calls for higher interest rates now in an effort to temper real-estate markets would be akin to "dousing" the economic recovery with cold water.
It delivered this message through a speech in Edmonton, and marked the first time the central bank tried to address directly myriad concerns that the country's real-estate market is appreciating too quickly, too soon.
"Recent house price increases do not appear to be out of line with the underlying supply-demand fundamentals," David Wolf, an advisor to the governor, Mark Carney, said in prepared remarks.
Data indicate existing-home prices have climbed 21% from a year ago while sales volume has surged 41%, prompting observers to indicate a housing bubble was underway due to record-low interest rates. New figures released Monday suggest housing starts rose 5.9% to a seasonally adjusted rate of 174,500 units in December, easily beating economists' average forecast of 160,000.
Mr. Wolf said housing bubbles, such as the one the United States experienced last decade, are usually fuelled by credit expansion, as borrowers and lenders "take false comfort from exaggerated house prices."
The current rally, during which existing-home sales have climbed more than 40% on a year-over-year basis as of November and prices have surged nearly 20%, is largely due to what Mr. Wolf described as "temporary factors," such as low interest rates and pent-up demand. Further, some buying has been "pulled forward," as people realize this is a once-in-a-lifetime opportunity to acquire property with historically cheap financing.
These factors cannot continue to drive home sales and prices, Mr. Wolf said.
"Thus, we see the housing market as requiring vigilance, but not alarm," said Mr. Wolf, who delivered the speech on behalf of deputy governor Timothy Lane.
He said the central bank is monitoring housing closely, and warned of the implications of using monetary policy to cool the market.
"If the bank were to raise interest rates to cool the housing market now - when inflation is expected to remain below target for the next year and a half - we would, in essence, be dousing the entire Canadian economy with cold water, just as it emerges from recession. As a result, it would take longer for economic growth to return to potential and for inflation to get back to target," he said.
The Bank of Canada has pledged to keep its benchmark rate at a record low 0.25% until July in an effort to foster growth and bring inflation to the central bank's preferred 2% target (which is expected in the second half of 2011).
Instead, regulatory changes - from changes to banks' capital requirements to the terms and conditions for mandatory mortgage insurance - are the preferred route to deal with housing-market excess, should concerns mount. This largely repeats the view forwarded last week by Ben Bernanke, chairman of the U.S. Federal Reserve.
Jim Flaherty, the Minister of Finance, has indicated he is concerned about the record levels of household debt and could introduce regulatory changes to address it, such as more stringent requirements to get mortgage insurance, which is a key condition required before banks agree to extend financing for a home purchase. Analysts say such a change could be included in the next federal budget, to be tabled in early March.
Economists at Scotia Capital said in a note the speech suggested the central bank was becoming "uncomfortable" with the "lightning-rod bubble talk" in the marketplace.
Nonetheless, the central bank "flagged the temporary nature of many of the factors driving recent strengths," they said.
Michael Gregory, senior economist at BMO Capital Markets, said mortgage growth has been rapid - around 7% on a year-over-year and three-month basis - but remains in single-digit territory and below historical peaks. Still, "a few more months of rapid credit growth and the [central bank's] conclusion may be very different."
pvieira@nationalpost.com
It delivered this message through a speech in Edmonton, and marked the first time the central bank tried to address directly myriad concerns that the country's real-estate market is appreciating too quickly, too soon.
"Recent house price increases do not appear to be out of line with the underlying supply-demand fundamentals," David Wolf, an advisor to the governor, Mark Carney, said in prepared remarks.
Data indicate existing-home prices have climbed 21% from a year ago while sales volume has surged 41%, prompting observers to indicate a housing bubble was underway due to record-low interest rates. New figures released Monday suggest housing starts rose 5.9% to a seasonally adjusted rate of 174,500 units in December, easily beating economists' average forecast of 160,000.
Mr. Wolf said housing bubbles, such as the one the United States experienced last decade, are usually fuelled by credit expansion, as borrowers and lenders "take false comfort from exaggerated house prices."
The current rally, during which existing-home sales have climbed more than 40% on a year-over-year basis as of November and prices have surged nearly 20%, is largely due to what Mr. Wolf described as "temporary factors," such as low interest rates and pent-up demand. Further, some buying has been "pulled forward," as people realize this is a once-in-a-lifetime opportunity to acquire property with historically cheap financing.
These factors cannot continue to drive home sales and prices, Mr. Wolf said.
"Thus, we see the housing market as requiring vigilance, but not alarm," said Mr. Wolf, who delivered the speech on behalf of deputy governor Timothy Lane.
He said the central bank is monitoring housing closely, and warned of the implications of using monetary policy to cool the market.
"If the bank were to raise interest rates to cool the housing market now - when inflation is expected to remain below target for the next year and a half - we would, in essence, be dousing the entire Canadian economy with cold water, just as it emerges from recession. As a result, it would take longer for economic growth to return to potential and for inflation to get back to target," he said.
The Bank of Canada has pledged to keep its benchmark rate at a record low 0.25% until July in an effort to foster growth and bring inflation to the central bank's preferred 2% target (which is expected in the second half of 2011).
Instead, regulatory changes - from changes to banks' capital requirements to the terms and conditions for mandatory mortgage insurance - are the preferred route to deal with housing-market excess, should concerns mount. This largely repeats the view forwarded last week by Ben Bernanke, chairman of the U.S. Federal Reserve.
Jim Flaherty, the Minister of Finance, has indicated he is concerned about the record levels of household debt and could introduce regulatory changes to address it, such as more stringent requirements to get mortgage insurance, which is a key condition required before banks agree to extend financing for a home purchase. Analysts say such a change could be included in the next federal budget, to be tabled in early March.
Economists at Scotia Capital said in a note the speech suggested the central bank was becoming "uncomfortable" with the "lightning-rod bubble talk" in the marketplace.
Nonetheless, the central bank "flagged the temporary nature of many of the factors driving recent strengths," they said.
Michael Gregory, senior economist at BMO Capital Markets, said mortgage growth has been rapid - around 7% on a year-over-year and three-month basis - but remains in single-digit territory and below historical peaks. Still, "a few more months of rapid credit growth and the [central bank's] conclusion may be very different."
pvieira@nationalpost.com
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