Thursday, October 30, 2008
Vancouver, BC – October 29, 2008. The British Columbia Real Estate Association (BCREA) released its fall 2008 Housing Forecast today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 28 per cent from 102,805 units in 2007 to 73,700 units this year. A modest 4 per cent increase to 76,500 units is forecast for 2009.
“The erosion of consumer confidence that began with rising fuel prices earlier in the year is continuing, as the global financial crisis and volatile equity markets have BC households concerned about their own finances,” said Cameron Muir, Chief Economist.
A weaker provincial economy is expected to increase the jobless rate from 4.4 per cent this year to 4.9 per cent in 2009. “While some job losses will occur next year, BC households will remain on a relatively solid financial footing,” added Muir.
The average MLS® residential price is forecast to increase 3 per cent to $453,000 this year. However, home prices peaked in the first quarter and have been edging lower for several months. For 2009, the average price is forecast to decline 9 per cent to $413,000, with most of the decrease having already occurred by the end this year.
Downward pressure on home prices is expected to ease by the second quarter of 2009, as an increase in affordability and consumer confidence induces a modest growth in sales. The inventory of homes for sale is also expected to decline in the coming months as potential home sellers delay putting their homes on the market until conditions improve.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
- Wash clothes with cold water. Between 80 and 90 per cent of the energy used to wash clothes is for heating the water. If all families switched to cold water washing, British Columbians would save $87 million.
- Install low-flow showerheads. They can use 40 per cent less hot water than older models and can be installed in minutes.
- Use faucet aerators. They mix air bubbles in the flow of water, slowing the amount of water that flows out, and save up to 40 per cent of the water used for hand washing.
- Keep a jug of water in the fridge rather than running the tap for cold water.
To learn more about ways to conserve energy in everyday life, as well as BC Hydro’s Power Smart residential programs such as mail-in rebates, ENERGY STAR® windows, PST exemptions and Power Smart New Homes, visit www.bchydro.com/powersmart.
Saturday, October 25, 2008
With the coals still smoldering across the city from the Kutanai Landing waterfront project debate, Sorensen Fine Homes principal David Sorensen appeared before city council Monday night touting the merits of his housing project, slated for the former Kootenay Forest Products land on the shores of Kootenay Lake.
The phrases “affordable housing,” “no cost to the taxpayer” and “site remediation” were again bandied about as Sorensen made his presentation to council.
He is proposing to build a 150-unit housing development with up to 30 below market value units, a hotel and small conference centre and 26 commercial units on the 12.5 acre parcel of land.
There would also be a marina included in the scope of the project, as well as public access to Red Sands Beach.
Like Kutanai Landing before it, the initial rhetoric sounds good, said Councilor Ian Mason, but proof of the project’s merit will be revealed as the development application process play’s out.
The affordable housing component, at first glance, is enticing, as is the $80 million worth of new construction and significant infusion of new tax base for the city, he said.
“Basically we’ve been presented with a concept but the devil is always in the details in these things. I’m cautiously optimistic with this one.” He said.
“It’s a big project for someone to build 20 to 30 units, it’s a big step. I’m happy to see people still have confidence in development in our community given the global financial climate.”
No lots will be sold in the development said Sorensen, only finished houses. For them to control the architecture and create something beautiful like the old streets of Nelson is really a big deal for the developer of fine-crafted homes.
“it’s absolutely all about a community,” he said. “There are no condominiums, we all get to use the waterfront, we all get to use the beach and nothing is over two-and-a-half storey buildings.”
Parts of the building site are considered brown-field and require environmental remediation. Sorensen has already acquired an approval in principle from the Ministry of Environment and will use Pottinger Gaherty as its environmental consultant.
Sorensen told council the approval has taken a risk assessment approach, with what is below the surface of the site being left untouched.
There will be a build up of clean top-soil around the new buildings with “many sources of clean fill” being available, said Sorensen.
The Peco decks, reaching out into the lake will be retained and used for a hotel inn, office and retail commercial space and a small conference centre. It will also be the hub for the marina.
Although Mason thought the project would fit nicely into the community – with affordable housing, public access to the waterfront, site remediation and no high-rise condominiums – he was cautiously optimistic.
“At first blush it looks like a project that would be widely accepted by the community. Having said that there is always someone who wants to toss a rock in that,” he said.
Rezoning will be sought, said Sorensen, because the zoning attached to the property is such a “mish mash” that the city wants to write it fresh, making it a public process to let people know what is happening there.
As the application process unfolds it will be seen whether council will be called on to make some decisions. The next step will be to formalize the application for the project and then go through the process for the permit approval.
Timothy Schafer Nelson Daily News October 23, 2008
Friday, October 17, 2008
The U.S. Commerce Department reported that new construction fell by 6.3 per cent for the month — much worse than the drop of 1.6 per cent that had been projected by economists.
On a seasonally adjusted basis, total production came in at an annual rate of 817,000 — the lowest pace since January 1991, when the U.S. was in recession.
Economists surveyed by Thomson/IFR had been expecting last month's housing starts to come in at an annual rate of 880,000 units.
The drop was led by a 20.9 per cent plummet in housing starts in the northeastern part of the country. Construction of single-family homes there fell to their lowest level on record.
The U.S. housing sector has been battered by the fallout from the subprime mortgage mess. Rising foreclosures have flooded the market with unsold properties, sending prices down.
"This housing sector report was simply awful, as it suggests that the U.S. housing market correction may have quickened in recent months," said Millan Mulraine, economics strategist at TD Securities.
"And with the U.S. economy appearing to have softened considerably in recent months, and the labour market remaining in a very depressing state, there is little to suggest that a turnaround in activity will occur any time soon," Mulraine said.
Royal Bank economist Josh Heller said that if a silver lining is to be found, it lies in the fact that the lower starts fall, the faster excess inventory in the U.S. housing sector will be worked off.
"Only once inventories of unsold homes retreat back to historical norms do we expect prices to stabilize and a steady recovery to take hold," Heller said.
Friday, October 17, 2008 CBC News
“The Property Transfer Tax detracts from provincial affordable housing initiatives previous budgets have put in place, such as enhancements to the First-Time Home Buyers’ Program, and changes to the Home Owner Grant aimed at seniors,” said Robert Laing, BCREA Chief Executive Officer.
The BC Government levies a Property Transfer Tax rate that is 129 per cent higher than the average for Canadian provinces. The rate—1% on the first $200,000 of a property and 2% on the remainder—has remained the same since the tax was introduced in 1987. The negative impact of the Property Transfer Tax on British Columbians appears to be at odds with the provincial government’s competitive taxation principles.
In a submission to the Select Standing Committee on Finance and Government Services, and as a first step to a fairer Property Transfer Tax that enables greater affordability and accessibility to housing, BCREA and CHBA BC suggest the government restructure the Property Transfer Tax to reflect current housing market conditions in BC by increasing the 1% tax threshold to $400,000 and levying 2% tax on the balance.
The second key recommendation is for the government to improve the attainability of green housing through a program that provides a Property Transfer Tax rebate to buyers of new homes that meet a Built Green™ standard for greenhouse gas emissions and less waste. With the introduction of a new building code and a desire by CHBA BC builders to build to a higher energy standard, a home can now cost between 4 and 6% more.
“Built Green™ BC is about healthier buildings for homeowners and for the environment,” noted M.J. Whitemarsh, CEO of the Canadian Home Builders’ Association of BC. “The incentive we propose would return money to British Columbians in a way that’s directly targeted at reducing greenhouse gas emissions.”
With Budget 2009, the BC Government has the opportunity to build on past initiatives to help British Columbians become homeowners and reduce the province’s carbon footprint.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Wednesday, October 15, 2008
“Weaker consumer demand and a large number of homes for sale are having an impact on home prices in the province,” said Cameron Muir, BCREA Chief Economist. “Despite relatively strong fundamentals, consumer confidence is low. The global liquidity crisis and volatile equity markets are intensifying this sentiment, causing many households to pull back spending on major purchases.”
“However, affordability is improving,” added Muir. “The carrying cost of the average home in the province is now lower than at any time since the end of 2006.”
Year-to-date MLS® residential sales dollar volume in the province declined 24 per cent to $27.5 billion compared to the same period last year. Provincial MLS® sales declined 28 per cent to 59,742 units, while the average residential price increased 6 per cent to $460,621 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Friday, October 10, 2008
Finance ministers, as well as bank heads from the Group of Seven countries — the most powerful economic nations in the Western world — pledged Friday to take "decisive action and use all available tools" to ease the crisis.
The group issued a five-point plan Friday evening after a meeting in Washington with U.S. Treasury Secretary Henry Paulson and U.S. Federal Reserve Chairman Ben Bernanke.
The measures include:
-Protection for major banks to prevent their failure.
-A commitment to help banks raise money from both public and private sources.
-A bolstering of deposit insurance.
-Help reviving the battered mortgage-financing market.
The Group of Seven countries are Canada, the United States, Japan, Germany, Britain, France and Italy. The finance officials are scheduled to meet with U.S. President George W. Bush Saturday at the White House.
Earlier in the day, Canadian Finance Minister Jim Flaherty announced his government's plan to buy the securities through the Canada Housing and Mortgage Corp. and provide much-needed cash to financial institutions that sell the so-called "National Housing Act mortgage-backed securities."
"This is going to make loans and mortgages more available and more affordable for ordinary Canadians and businesses," he said.
Flaherty, who attended the meeting in Washington, announced the new measures in an attempt to assuage concerns over the burgeoning global financial crisis and defuse criticism that the Conservative government was ignoring the spreading lending crisis.
He was expected to argue in Washington for tighter regulations of the kind that has kept Canada's banking system solvent in the middle of the global crisis.
Also Friday, Bush sought to assure the American public that governments worldwide were hard at work to counter the economic turmoil. He called for co-operation between the U.S. and other nations.
"We've seen that problems in the financial system are not isolated to the United States," he said in brief remarks from the White House Rose Garden.
"So we're working closely with partners around the world to ensure that our actions are co-ordinated and effective."
Members countries from the Group of 20 will meet with Paulson in Washington Saturday to discuss the crisis, which is also expected to dominate discussion at weekend meetings of the 185-nation International Monetary Fund and the World Bank in Washington.
CBC News Friday, October 10, 2008
TD Canada Trust and CIBC said it will lower the rate by another 15-hundredths of a point to 4.35 per cent, effective next Tuesday.
"We believe this initiative will be put into effect in a way that will reduce our overall cost of funds and, as a result we are dropping our rate today," Tim Hockey, president and CEO of TD Canada Trust, said Friday.
"Financial markets are very turbulent, and funding costs are still high. However, we anticipate that our cost of funds will decrease with the implementation of this program, and therefore wanted to take action that will benefit our customers directly."
The Bank of Nova Scotia, the Royal and the Bank of Montreal announced shortly afterward that they are cutting their prime rate by 0.25 points to 4.25 per cent.
Canada's big banks were under fire earlier this week after they decided to pass only part of the Bank of Canada's half percentage point rate cut to consumers. The banks said the decision was made because of volatile credit markets.
Speaking in Ottawa Friday, Flaherty said the decision to buy the mortgage debt from Canadian banks was being made in an effort to stabilize the lending industry and encourage lower interest rates.
Flaherty made the announcement before heading to Washington to meet with other G-7 finance ministers to formulate a plan for dealing with the current economic turbulence.
He said the mortgage debt will be purchased by the Canadian Mortgage and Housing Corp.
Flaherty said that will ease pressure on lending institutions and prompt banks to lower their interest rates for Canadians, which could spark renewed buying activity.
He said the plan is "efficient, cost-effective and safe way to support lending in Canada that comes at no fiscal cost to taxpayers."
Don Drummond, chief economist for TD, called the plan "music to my ears" and said it should benefit everyone involved.
"I don't think there's a risk of loss to the government, so it strikes me that those three partners -- the government, the CMHC and the banks all win and that helps ease up to some degree the credit flow in Canada," he told CTV's Canada AM.
Derek Holt, of Scotia Capital, said the move is a "healthy, positive step" designed to make loans available for those who qualify.
"That's the hope, that by taking mortgage backed securities out of the banking system that are illiquid, that they cannot move, cannot sell to the marketplace, and giving cash instead, that banks will then turn around and use that cash to generate more loan growth to businesses and households in Canada," Holt said.
Flaherty maintained the position the Conservatives have taken since the election campaign began -- that the economy is still strong and well protected from U.S.-style economic turbulence brought on my the sub-prime mortgage crunch.
He said Canadian banks and financial institutions are "sound and well-capitalized, and less-leveraged than their international peers."
Not a bailout
Prime Minister Stephen Harper has also sought to reassure Canadians that the economy is stronger than its U.S. counterpart, and will weather the economic storm.
Just yesterday, Harper said the government would not be providing a bailout to banks.
During a campaign stop Friday in Brantford, Ont., Harper said the deal to buy mortgages was an asset swap, not a bailout.
"The government's main concern right now is obviously the cost and availability of credit," Harper said Friday. "Part of what has been happening is, because of the problems in the banking systems around the world, there's less and less inter-bank lending and therefore credit conditions are becoming tight even in Canada.
"...What we're trying to do today is make sure that the banks can take some good assets and turn those into cash so they can make that available to small business, to people seeking mortgages."
The opposition has accused Harper of taking a "do nothing" approach, but he maintains his government has been quietly preparing for the slowdown and shouldn't take drastic reactionary steps now.
Flaherty said the mortgage buyout has been talked about for months.
Meanwhile, Liberal Leader Stephane Dion accused Harper of contradicting his own words about taking action on the economy.
"After months of saying no action was required and his approach was sufficient, it appears, four days before Election Day, Stephen Harper has now had a change of heart," Dion said in a statement Friday.
"It is no surprise that many Canadians will believe that the Conservatives are playing partisan politics with their mortgages and savings in the dying days of a federal election."
Dion said the "11th hour conversion" will not reassure Canadians that Harper understands their needs.
Fri. Oct. 10 2008 CTV.ca News Staff
The first purchase of $5 billion will be made October 16, 2008 through a competitive auction process. The mortgages involved are high-quality assets that are already guaranteed through government-backed mortgage insurance. The Government will announce a schedule of future purchase dates to take place over the coming weeks.
Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency for more than 60 years. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country.
CMHC OTTAWA, October 10, 2008
Thursday, October 2, 2008
“These days, REALTORS® in Canada face a lot of questions about the real estate market, real estate price bubbles, and the value of a home. That’s because we are at the end of an unusually active period in Canadian real estate – 2007 was a record year for many of the things we use to monitor the real estate market, including the average MLS® residential price,” said the President of The Canadian Real Estate Association, Calvin Lindberg.
“We must remember that all markets go through cycles, and remember that the national housing market is actually made up of different communities. Real estate markets are local, and every community, and every area, is different in terms of trends and pricing,” the CREA President added.
“Slower activity in some of Canada’s pricier housing markets compared to year-ago levels will continue weighing on the national average price,” explains CREA Chief Economist Gregory Klump.
“As our analysis shows, the Canadian housing market is stable and home sellers are not under pressure to sell. This is in stark contrast to the U.S. housing market, where there are a large number of distress sales. In Canada, with price gains diminishing and homebuyers taking more time to shop, the number of active MLS® listings may continue to ease so the Canadian housing market would stabilize further.”
CREA OTTAWA – September 30th, 2008