“I never used that word, retire.” -B.B. King

Facts by Email

BUYERS TOOK OUR TOWNHOME PROJECTION TO HEART

DON’T TRUST THE DEVELOPER IN PRE-SALES

HIGHLIGHTS OF CREA’S NATIONAL HOUSING REPORT

CASHING IN ON AGRICULTURE LAND RESERVES

CONFERENCE BOARD SEES RECESSION IN CALGARY

MANITOBA 2015 RENT INCREASE:
2.4%

MORTGAGES WILL STAY LOW UNTIL 2017

UPDATE: OFSI B-21 TIGHTENS MORTGAGES NEXT MONTH

TALK TAK TALK

Ozzie talks at the Real Estate Institute of Canada Annual conference this week! Professional development sessions, outstanding speakers. Don’t
miss the entire conference May 26 – 28, 2015 in Vancouver. Or – if limited time – attend select sessions. Book here NOW.

I will be speaking at 11 AM Thursday – Topic: Canada Real Estate: Boom or Bust in 2015!

SEE YOU THERE!

Buyers Took Our Townhome Projection To Heart

Two months ago we singled out townhomes as offering about the best new housing deal in the Lower Mainland, citing stable prices, low per square foot cost
compared to condos, and an aversion of offshore buyers (who normally prefer concrete condominiums) as reasons why the attached market was worth a look,
especially in the Fraser Valley. In-migration trends were changing, we noted, with less immigrants arriving compared to those from other provinces.

Apparently, many buyers got the message. In Langley, as one example, the 52-unit Exchange townhome project by Hayer Builders Group sold out every unit ($320,000 average) in 52 days. And, across the Lower Mainland, 878 new townhomes were sold in the
first quarter of this year, the highest level for any quarter in five years, according to the Urban Development Institute, Pacific Region
(UDI) – with 608 of townhomes selling in the Fraser Valley.

The UDI’s State of the Market, to be released this Friday in Vancouver (we got a sneak copy) also shows that housing starts are barely keeping up
the population increase in Metro Vancouver. During the first quarter, overall new home starts were down 7%, to 3,268 units, from a year ago and tracking
18% lower than the three-and-half-year average. But Metro Vancouver’s population increased 7% from the first quarter of last year, (by 9,200). The current
ratio of 2.8 new residents per housing start is tied with a four-year high, a ratio “which favours sellers and landlords.”

And here is the kicker:
immigration to B.C. is now being usurped by inter-provincial migration. In the last quarter of 2014, immigration went negative to the tune of 3,254, the
highest negative number recorded over the past 10 years. In comparison, interprovincial migration was up by 2,566 in the quarter. An estimated 2,106,500
people now live in Metro Vancouver, up by 33,500, from the fourth quarter of last year and up from 1,750,000 just 10 years ago, the UDI reports. (We don’t
expect this trend to hold. While we expect more interprovincial migrants, especially from Alberta, we also believe immigration levels will also increase
and soon dominate the inflow.)

Condo Inventory Is Falling

The following highlights the current state of the new condo market in Metro Vancouver.

New townhome market

  • The 608 new townhome sales in Outer Metro (Fraser Valley) this past quarter were also the highest quarterly sales total recorded here in 5 years.
  • Released townhome inventory (1,003) is relatively consistent with the same quarter last year (1,063).
  • Overall standing inventory totals for townhomes (258) are down 43% compared to the same quarter last year.

Woodframe low-rise

The most noticeable drop occurred in Vancouver- down from 24 active projects in Q4-2014 to 20 in Q1-2015.

  • There were 973 sales of new wood frame condominiums recorded in Metro Vancouver this 1st quarter – 190 in Vancouver, 498 in Metro
    suburbs and 285 in the Fraser Valley.
  • Overall sales totals (973) were up 24% compared to the same quarter last year.
  • Notable sales activity in Q1-2015 were at Alexandra Court (Richmond), Redbrick (Burnaby), Bradley House (Coquitlam) and Yorkson Creek (Langley).
  • Released inventory of new wood frame condominiums (2,339) is down 14% from last quarter and is down 22% compared to the same quarter last year.
  • Current standing inventory levels of wood frame condominiums in Metro Vancouver (643) are down 38% from the same quarter last
    year.

Concrete condo towers:

The total number projects selling throughout Metro Vancouver remained relatively consistent with last quarter – 57 in Vancouver, 67 in the suburbs and 9 in
the Fraser Valley.

  • Overall concrete condominium sales (2,231 in total) were up 22% compared to the same quarter last year and up 145% from the same quarter in 2013.
  • Notable projects that sold a significant number of units in Q1-2015 are- The Independent (Vancouver East), The Wohlsein (Vancouver East), Riversky
    (New Westminster), Brentwood II (Burnaby) and The Park (Metrotown).
  • These projects sold a combined total of 662 units this past quarter.
  • Overall concrete condominium inventory levels in Metro Vancouver (4,918 total) are up 3% from the same quarter last year.
  • Overall standing inventory levels of new concrete condominiums (421) are down 33% from the same quarter last year.

Major Point: The excellent UDI State of the Market report confirms the new condo market is well balanced and is not facing a serious inventory
problem. When in-migration numbers begin increasing this year, a shortage of new product may even emerge.

Don’t (Always) Trust The Developer In Pre-sales

It may be a good idea to bring a realtor with you when you are looking at buying a pre-sale condominium, says Neil Hamilton, a veteran
agent with Mcdonald Realty in Vancouver (604-569-1940.)

Hamilton notes that a developer’s pre-sale contract can run to 35 or 40 pages “and is heavily weighted in favour of the developer.” For
instance, a developer can retain the right to change the configuration or even the actual square footage of a unit. A developer can also delay the suite
possession for a number of reasons, but if you, as a buyer, wish to delay for any reason you may be in default of the contract. “Developers have teams of
well-paid lawyers”, Hamilton notes. “You should have a realtor and a good lawyer as part of your team in any presale condo purchase, period.”

 

Highlights Of CREA’s National Housing Report

According the Canadian Real Estate Association national home sales activity posted a third consecutive month-over-month increase in April
2015. Here are the highlights:

  • National home sales rose 2.3% from March to April.
  • Actual (not seasonally adjusted) activity stood 10% above April 2014 levels.
  • The number of newly listed homes was little changed from March to April.
  • The national average sale price rose 9.5% on a year-over-year basis in April; excluding Greater Vancouver and Greater Toronto, it increased by 3.4
    %.
  • The actual national average price for homes sold in April was $448,862, up 9.5% from a year ago.

Cashing In On Agriculture Land Reserves

Some wily “green” entrepreneurs, mostly foreign, have found a way to cash in on B.C. Agricultural Land Reserves, which make up 1.16
million acres in the province. The BC Agriculture Council, in a letter to the provincial government, says that investors
are buying farmland and planting trees to collect and sell carbon credits. So far, about 500 acres has been bought for carbon-capture tree production,
mostly in the Cariboo and Prince George region.

Major Point: If the ALR can be used to grow trees for the questionable carbon-credit market, why can’t some unproductive farmland be used to ease the acute shortage
of land for housing? We remain convinced that buying farmland in the Lower Mainland for a long term hold is a fantastic investment.

Conference Board Sees Recession In Calgary

Calgary and Edmonton will fall into recession this year, the Conference Board of Canada cautions in its latest outlook for municipal
economies.

Calgary’s economy will contract by 1.2% and Edmonton’s real GDP is forecast to drop by 0.8%, the Conference Board predicts.

“The energy sectors in both cities will decline, but other sectors will also feel the pinch from lower oil prices, including construction, transportation
and warehousing, and wholesale and retail trade,” said the board’s Metropolitan Outlook: Spring 2015 report.

The report said oil prices are expected to recover “somewhat” in 2016, leading to modest growth in both cities of 1.5% in Calgary and 1.3% in Edmonton.

“The collapse in oil prices has significantly altered the economic outlook among [Alberta’s] largest cities. Most other [Canadian] cities will see their
economic fortunes improve this year, thanks largely to a weaker Canadian dollar and a stronger U.S. economy,” said Alan Arcand, associate
director for the board’s Centre for Municipal Studies.

Major Point: Watch for sales tax intro to keep up government revenue … and no spending cuts by the NDP.

Manitoba 2015 Rent Increase: 2.4%

The Manitoba government has declared that rents may go up no more than 2.4% in 2015, but there are exceptions for new units and expensive rentals.

The rent limit does not apply to:

  • rental units renting for $1,435 or more per month; and
  • new buildings that are less than 15 years old, where an occupancy permit was first issued or a unit first occupied after April 9, 2001; or less
    than 20 years old, where an occupancy permit was first issued or a unit first occupied after March 7, 2005.

The province’s rent limit is now linked to the consumer price index and fall within the Bank of Canada‘s inflation-control target range.

The new regulations also tighten requirements for exemptions from rent regulation when landlords make renovations, and will limit how often landlords can
apply for those exemptions.

The average rent for a Winnipeg one-bedroom apartment is $751 compared with $888 in Regina, $1,087 in Calgary and $1,500 in Vancouver.

Hot Property:

1. Triplex in Victoria for $645,000, t
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Any property can be
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