The world's favorite season is the spring.
All things seem possible in May.
— Edwin Way Teale
Jay & Brenda News
Couldn't resist this total encapsulation of our real estate market by Thomas Davidoff, director of the Centre for Urban Economics and Real Estate at the UBC Sauder School of Business as published in the Vancouver Sun:
Imagine a candidate for office saying "I promise to meddle in real estate markets and set taxes to hurt workers, businesses, and the environment. I will drive families out of Vancouver to empty and close its schools, while overcrowding suburban schools. Why? To subsidize luxurious homes for rich people who pay taxes elsewhere.
This is in fact the net result of failed decision making and short-sightedness on the part of the federal, provincial and local governments and an unwillingness to remedy it. Much handwringing, little action. No politician wants to make a decision that will impact the pocketbooks of their reliable homeowning voters.
Sadiq Khan the new Mayor of Greater London (as opposed to the Lord Mayor of London who represents the City, one of 33 London boroughs) campaigned on a platform of greater affordability and limiting the ability of offshore buyers mainly from Russia and the Middle East to buy properties. The residents are being squeezed out by high prices and the "safety deposit boxes in the sky" are mostly unoccupied by their owners. Sounds very familiar to Vancouverites and New Yorkers. The Mayor and the 25 member elected London Assembly can make policy and impose higher VAT taxes on real estate where as Vancouver has to have any changes to the Vancouver Charter instituted by the Provincial Government. Good luck with Premier Christy Clark making any financial decisions that affect the fortune rolling in from the Property Transfer Tax on all the expensive real estate changing hands.
In Metro Vancouver affordability is the issue of the day and we are all suffering the Law of Unintended Consequences. The high end of the market is driven by foreign investors, predominantly from Mainland China. All the studies in the world don't alter the view from the ground. Realtors are caught up in this maelstrom and most wish only that the market was accessible to their local clients. Teardowns on 33' lots in Point Grey are going as high as $3.1 million. Those buyers who purchased properties in the provincially administered University Endowment Lands have to deal with strict noise bylaws for the non-stop construction but fewer building restrictions on what is being built.
One prominent Westside realtor said that traditional buyers in Vancouver loved character homes in long established neighbourhoods but offshore buyers like only new and a quick turnover with as few zoning regulations as possible. According to this colleague Kerrisdale and Shaughnessy are not as popular as Point Grey due to the efforts of the City of Vancouver to preserve some of our history.
The lack of available inventory, particularly of townhomes leaves a gaping hole in the market. The historical focus of Vancouver on large lots with detached homes has prevented the middle way of home ownership: an attached home. There is no form of semi-detached houses here where two properties are joined by a common wall but are held in freehold ownership by each side. Neighbourhoods on the East and West side of Vancouver could have been easily densified in the past. The idea that a 33'lot is small and that areas like Dunbar / Southlands with 66' lots that cannot be divided is 1940s thinking and preventing more affordable growth in Vancouver.
This affordability problem is hitting companies wanting to expand their businesses and recruit skilled employees. Businesses as diverse as Seaspan Shipyards and Hootsuite tech are sounding the alarm about lack of all types of housing including rentals. Jeffrey Simpson in the Globe and Mail states that opposition in BC to any natural resource extractions, pipelines, growth of any kind is going to leave us with a burnt out economy as the rest of Canada can't ship resources to the Coast. Our only economic growth will be centred in the foreign ownership of Vancouver real estate. This foreign real estate investment is heating up in the commercial marketplace due to political stability and the low loonie. Anbang Insurance Company of Beijing has been approved by the Federal government as purchaser of 60% of the Bentall Centre. Anbang is currently negotiating to buy the remaining 40% from its current owners. Price for the project is estimated at $1 billion.
Burnaby in its ambitious growth plan is bucking the touchy-feely trend. Mayor Derek Corrigan is a friend to development and a clear-eyed realist. There is an outcry over the demolition of older multi-family rental housing around Metrotown as it dispossesses many low income residents who cannot find other housing. According to the Stop Demovictions Burnaby campaign these demolitions are creating a huge homeless problem for families and seniors. There are about to be 684 apartment units with 2 persons per unit eliminated. Corrigan's response reflects the Burnaby master plan of building denser communities around SkyTrain lines to house another million people expected by 2040. He states "...We are more than replacing rental housing. The difficulty is the rental housing isn't being replaced at the same price." There we have the entire problem of gentrification summarized.
It seems that Dr Samuel Johnson's aphorism "When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully" has been taken to heart by Premier Christy Clark and the BC Liberals. Substitute "face election in 2017" for being hanged and the motivation for recent backtracking and largesse is made clear.
In Surrey after a public outcry about developments being permitted with no schools approved the provincial government announced changes to their policy of waiting for developments to be finished so they could count the children and then build a school. They added 2,700 new spaces and are now saying that they need to monitor school districts that are growing quickly so they can build new schools in a timely fashion.
In the meantime Vancouver voters were surprised to hear that in the battle to reduce deficits at the School Board and to meet provincial guidelines the VSB is looking to close schools at less than 95% of enrollment in order to qualify for seismic upgrades in full schools. The counting method may be an election issue. In 2000 Education Minister Christy Clark opened school boundaries for every public school in BC. Westside schools in Vancouver, many with special programs such as French Immersion, suddenly filled up with students from East Van leaving many East Vancouver schools at low enrollment and in danger of closure. The Board will now be counting enrollment by home address. If families live on the east side the local school will be the numerical beneficiary of their children currently attending a Westside school thus leaving Westside schools empty and east side schools full statistically speaking. This plays into the recommendations from the provincially commissioned Ernst & Young report which stated that many schools in Vancouver needed to be closed due to lack of enrollment which circles around to lack of affordability in the housing market. No young families on the Westside. Many in East Van. Thousands of them in Surrey.
After insisting on a (defeated) transit referendum in July 2015 so that the public paid the cost of transit improvements before any government contribution the Provincial Minister for Translink is now showering $246 million on Metro Vancouver ostensibly so the region does not miss out on a $370 million federal grant which is contingent on the province and Translink paying their share of the 10 year $7.5 billion project. Any transit improvements impact real estate near transit hubs. Property values shoot up. Translink is looking to sell the air rights above transit stations to developers to help fund the Translink share of the costs. The Premier has stated that there can be no investment where there is insufficient density in contrast to the original SkyTrain built in the 1980s through residential neighbourhoods filled with white picket fences and detached homes.
George Bernard Shaw said it all: "Progress is impossible without change, and those who cannot change their minds cannot change anything."
It's been lots of work, lots of fun, visitors coming and going. This is the year that people are coming to see us in Vancouver. We had our dear friends Dave and Grace and their family from Toronto in April/May, our Matron of Honour Wendy from Denver in June and TA-DA!!! Alec, Lucia and Constantin from Europe in July. We are planning great events to celebrate. Wendy and I are planning a jaunt to Victoria while she is here. Alec and family have lots of ideas. They are hoping to go to Gambier Island, Mecca for all younger family members as well as visiting all the relatives who are dying to see them and to meet Lucia and Constantin.
I will be visiting Toronto in June to see family and friends. Julie and I are great fans of best selling Canadian author Louise Penny and her wonderful murder mysteries set in Quebec and the Eastern Townships village of Three Pines. They feature an amazing cast of characters headed up by Chief Inspector Armand Gamache of the Surete du Quebec. Julie and I are going on a pilgrimage to Quebec City and the small towns in the surrounding countryside. This is my big trip for the year. Not quite cruising down the Danube River as we did in 2015 but pretty exciting and closer to home.
Jay and Effi will hold the fort while I am gone. Watering all the flowers heads up my list of chores for Jay in my absence. He may get in some golf with nephew Jordy and will have lots of time for walks with Effi. Jay is fortunate to enjoy his work and all the people he meets and serves so that will always keep him busy.
Alec and Lucia are busy organizing their business and responsibilities for when they are in Canada. They plan time in Toronto and Vancouver. Constantin is continuing to grow up so quickly. As he stomps down the road with Alec and Thor it's hard to believe he was a swaddled infant when Julie and I met him in June of last year. Thor will be going to Lucia's family home in Riecka to stay with her father. Thor loves it there.
Kath and Stef are working hard and looking after their canine cast. They enjoyed the May 24 weekend work party at Crooked Creek helping to get the cottage ready for the summertime invasion. Kath has been training for the Ride to Conquer Cancer taking place on the weekend of June 10. Each year their Proud Mary's Team rides from Toronto to Niagara Falls to raise money for research at the Princess Margaret Cancer Centre where Julie was treated.
Mary's big excitement is her early retirement from the City of Toronto on June 1. She has been feted by all her colleagues and is ready to spend some serious down time at the cottage. She and Julie hosted the May 24 work party at Crooked Creek with family and friends. While everyone worked Kath and Julie did some heavy duty bike training riding 60 km on the country roads near Bancroft.
Julie and her Team have had a busy Spring. It's a lot like Vancouver where realtors can write many offers for clients before one is accepted. Fortunately their listings have kept them busy. One of their big Spring events is Client Appreciation Day at the Blue Jays game. Clients love to come and bring their kids.
FYI: We find that working with clients at every stage of life: buying first condo homes, moving up to family size townhomes or detached, then downsizing from the large family home to a condo again keeps us busy. We hope that Life is good for you too.
Real Estate News
The complete April 2016 Stats Package from the Real Estate Board of Greater Vancouver is also posted.
Dan Morrison, President of the Real Estate Board of Greater Vancouver states "Home buyer competition remains intense across the region. Whether you're a home buyer or seller, it's important to work with your local realtor to get the to get the information you need and to develop a strategy tha will help you navigate today's market."
"While we're seeing more homes listed for sale in recent months, supply is still chasing this unprecedented surge of demand in our marketplace," Morrison said.
According to the Real Estate Board of Greater Vancouver MLS residential property sales of detached, attached and apartments reached 4,781 in April 2016, a.14.4% increase compared to 4,179 sales in April 2015.
April sales were 41.7% above the 10- year sales average for the month.
In April 2016 the number of residential properties listed for sale on the MLS in Greater Vancouver was 7,550. This is a decrease of 39.3% from April 2015 (12,436).
With the sales-to-active-listings ratio at 63.3% in March 2016, it remained a seller's market which typically occurs when this ratio exceeds 20 percent for a sustained period of time.
The REBGV Home Price Index includes Benchmark Prices for consistent comparisons. Benchmarks represent a typical property within each market. The benchmark property descriptions have been updated to reflect current buying trends.
|Home Price Index / Benchmark Prices|
|Detached||April 2016||1 year change||5 year change|
|West Vancouver||$2, 928,200||31.6%||75.0%|
|Townhouse||April 2016||1 year change||5 year change|
The following schedule shows the change in sales volume from April 2015 to 2016:
|Detached Home Sales|
|April 2016||April 2015|
|April 2016||April 2015|
Change is in the air. We’re still advising clients to take advantage of the continuing low interest rates available now whether you are moving up or down in the market. You will be glad that you did so at this time!
We thank you for your referrals and look forward to assisting you or any of your friends and family with future real estate needs.
April showers bring May flowers. May you enjoy our Spring bounty.
Jay Banks & Brenda Kinnear