Despite growing confidence that economic growth is in the offing, monetary policy around the world is likely to remain “ultra-accommodative,” perhaps until 2011. Read the article in the Financial Post.
CANADIAN and Australian cities account for six of the top ten spots in the Economist Intelligence Unit’s latest liveability ranking. All of the cities in the top ten scored well over 80.0, the threshold below which difficulties are apparent in day-to-day living. Vancouver is still the world’s most liveable city, with a rating of 98.0; Sydney and Zurich, sharing ninth place, achieved a score less than 2% lower than Vancouver’s. The worst-performing locations are in Africa or Asia, where civil instability and poor infrastructure present significant challenges. The unfolding political and economic crisis in Zimbabwe makes Harare the least desirable city in the survey. Locations within Afghanistan and Iraq are not included.
See top 10 and bottom 10 rankings here.
As part of its Spring 2009 Housing Forecast, the British Columbia Real Estate Association (BCREA) reported today that housing market conditions have improved more rapidly than expected. As a result, BCREA has revised its home price forecast upwards, reflecting greater price stability through the balance of the year. The average Multiple Listing Service® (MLS®) residential price in British Columbia is forecast to decline eight per cent to $420,600 in 2009, instead of 13 per cent originally forecasted at the beginning of the year.
Read the full article here.
It’s been a difficult twelve months for BC’s housing markets. No question. However, while we wait to hear the latest unemployment figures or government stimulus packages it might be fun, or perhaps even refreshing, to take a look at two things that are working in BC’s favour. The first is population growth, without which the housing stock wouldn’t need to expand; and housing affordability, the quiet redeemer of markets.
BC’s population grew by an impressive 14,440 from October to January, second only to Alberta. This was the highest fourth quarter of growth since 1996. The largest contributor to this growth was international migrants, netting BC 10,255 individuals during the fourth quarter, 64 percent more than a year ago. In fact, net international migration broke the record books in 2008, even surpassing 1996 when the province experienced a significant influx of Hong Kong immigrants. However, weaker economic conditions have slowed migration from other provinces, as BC’s economy is no longer the brightest light in the country. Net interprovincial migration fell to 6,450 individuals in 2008 from 15,520 in 2007, but nonetheless remained in positive territory.
Despite the current challenges in the economy, migration will become increasingly important over the coming decades as BC’s population ages, and deaths begin to outpace births. By 2026/2027, migration may be the only source of population growth for the province. If BC Stats current population projections are any indication, the recent level of migration will be the norm and not an exception. Annual net migration is expected to range between 50,000 and 60,000 individuals over the long term. In twenty years, this could add another 1.27 million people to the province. This means that demand for housing will be robust over the long-term, despite the current weakness.
Housing affordability is the relative difference between household income and the carrying cost of ownership, in other words — your mortgage payment. Lenders typically limit the carrying cost to a maximum of 32 percent of the borrower’s pre-tax income. Since incomes tend to grow very slowly compared to short-term changes in mortgage interest rates and home prices, the carrying cost of the average home in the market is a great indicator of housing affordability.
Many market watchers concentrate solely on home prices relative to income and ignore the impact of interest rate changes, which can be significant. You may be surprised to learn that while the average price of a home in BC is down 11 percent from a year ago, the carrying cost has actually declined 23 percent, the difference being lower mortgage interest rates. The combination of lower home prices and lower interest rates means buying a home in BC is now more affordable than at any time in the last three years, which coincidently was the last
time the carrying cost of housing made sense relative to income.
So, population growth is very much in BC’s favour for at least the next few decades. This will keep our homebuilders building despite brief downturns in the market. In addition, housing affordability makes a lot more sense today. A typical home buyer’s mortgage payment has been slashed by nearly one-quarter over the last twelve months. No wonder so many potential buyers are kicking tires.
Article reprinted from the June 2009
issue of BC Homes Magazine.
By Cameron Muir,
BCREA Chief Economist
Does your home have a humidity problem? Go here to find tips on how to control the problem.
Vancouver, BC – August 24, 2009. The British Columbia Real Estate Association (BCREA) today launched a new section of its website to provide the public and REALTORS® with information about the impact of the proposed Harmonized Sales Tax (HST) and an opportunity to voice their concerns about the tax. This new resource, which can be found here, encourages concerned citizens and REALTORS® to proactively communicate their dissatisfaction with the HST by sending letters to their local MLAs, Premier Gordon Campbell, Minister of Finance Colin Hansen and Carole James, Leader of the Official Opposition.
“Housing is an essential basic need and a significant part of the BC economy,” said BCREA president John Tillie. “We hope the public will join with REALTORS® across the province to express their concern by writing to the government. The HST is unfair to homebuyers and sellers, and the government must take action to minimize the impact of this unfair tax on consumers.”
On July 1, 2010 the proposed HST will significantly increase the cost of buying and selling all property, particularly newly-built homes. With almost 60 per cent of a BC family’s household income required to cover home ownership costs, BCREA is concerned that homebuyers will bear most of the burden associated with the HST resulting in a negative effect on BC’s housing affordability.
BCREA is calling on the provincial government to exempt real estate related services, and to increase the rebate threshold on new housing to at least $500,000, with the threshold indexed for inflation and adjusted annually. The government should also amend the flat rebate of $20,000 to a fixed percentage rebate of four per cent for new homes over the rebate threshold and introduce a three-year phase-out of the Property Transfer Tax to restore fairness for homebuyers.
In East Vancouver there are currently 184 active one-bedroom properties for sale, ranging in price from $179,000. to $1,249,000., with the average asking price being $315,329. There have been 321 sales since April of this year, with the average selling price being $277,255. and the average cost per square foot being $418. The least expensive sale price so far this year was for $116,000. in June and the most expensive was for $650,000. in January. With 184 properties currently for sale and 75 sales in July, there is a 2 & 1/2 month supply of homes.
In Mount Pleasant there are currently 67 active one-bedroom properties for sale, ranging in price from $184,500. to $719,900., with the average asking price being $346,891. There have been 91 sales since April of this year, with the average selling price being $302,473. and the average cost per square foot being $436. The least expensive sale price so far this year was for $116,000. in June and the most expensive was for $586,000. in May. With 67 properties currently for sale and 20 sales in July, there is a 3 month supply of homes.
In Grandview there are currently 14 active one-bedroom properties for sale, ranging in price from $199,000. to $463,000., with the average asking price being $298,671. There have been 30 sales since April of this year, with the average selling price being $245,875. and the average cost per square foot being $376. The least expensive sale price so far this year was for $162,500. in May and the most expensive was for $395,000. in June. With 14 properties currently for sale and 8 sale in July, there is a 1 & 3/4 month supply of homes.