The Bank of Canada leaves its target overnight benchmark rate unchanged at 0.25%

General Robyn McLean 21 Apr

A review of today’s Bank of Canada announcement and what it means for Canadians from our friends at First National.

The Bank of Canada made its interest rate decision today

This morning, in its third announcement of 2021, the Bank of Canada left its target overnight benchmark rate unchanged at 0.25%. As a result, the Bank Rate stays at 0.5%.  It also issued its quarterly Monetary Policy Report – a must read for those who follow the Bank’s inflation and growth projections.

The biggest news coming from today’s announcement is the Bank updated its thinking on the timing of future interest rate policy movements. For much of the past year, it signaled that policy interest rates would stay at the Bank’s effective “lower bound” until its inflation targets were met – which it did not expect to happen until 2023. It now expects this to occur “sometime in the second half of 2022.” (See “Looking Forward”)

Prior to the announcement, speculation amped up that the Bank would taper asset purchases that have been the central feature of monetary policy since the pandemic began last year. This speculation was correct. The Bank announced that effective April 28, 2021 “weekly net purchases of Government of Canada bonds will be adjusted to a target of $3 billion” reflecting “the progress made in the economic recovery.” Previously, the Bank’s quantitative easing (QE) program involved the weekly purchase of “at least $4 billion” of bonds.

The Monetary Policy Report noted in particular that the overall Canadian outlook has been revised upward since January. The Bank also commented specifically on Canadian housing construction. Here is a summary:

Canadian economic conditions

  • The Bank now forecasts real GDP growth of 6.50% in 2021, moderating to around 3.75% in 2022 and 3.25% in 2023
  • Growth in the first quarter of 2021 appears to have been “considerably stronger than the Bank’s January forecast,” as households and companies adapted to the second wave and associated restrictions
  • Substantial job gains in February and March boosted employment, however new lockdowns will pose another setback “and the labour market remains difficult for many Canadians, especially low-wage workers, young people and women”
  • As vaccines roll out and the economy reopens, “consumption is expected to rebound strongly in the second half of this year and remain robust over the projection period”
  • Strong growth in foreign demand and higher commodity prices are expected to drive a robust recovery in exports and business investment Canadian Housing
  • Housing construction and resales “are at historic highs, driven by the desire for more living space, low mortgage rates, and limited supply”
  • The Bank will “continue to monitor the potential risks associated with the rapid rise in house prices”

Global conditions

  • Global economic growth is “stronger than was forecast” in the Bank’s January 2021 Monetary Policy Report “although the pace varies considerably across countries”
  • After a contraction of 2.5%, the Bank now projects global GDP to grow by just over 6.75% in 2021, about 4% in 2022, and almost 3.50% in 2023
  • The recovery in the United States “has been particularly strong, owing to fiscal stimulus and rapid vaccine rollouts”
  • The global recovery has lifted commodity prices, including oil, contributing to the strength of the Canadian dollar

Inflation

Over the next few months, the Bank believes inflation will rise temporarily to around the top of its 1-3% “inflation-control range.” However, it attributes this to the fact that prices of some goods and services fell sharply last year and since December, gasoline prices have risen above their pre-pandemic levels.

The Bank therefore expects CPI inflation to “ease back toward 2% over the second half of 2021” as these base-year (2020) effects diminish. Inflation is also expected to ease further because of what the Bank calls the ongoing drag of excess capacity. As slack is absorbed, inflation should return to 2% on a sustained basis “some time in the second half of 2022.”

Looking forward

Even as economic prospects improve, the Bank’s Governing Council believes there is still considerable excess capacity in Canada, and that the economic recovery “continues to require extraordinary monetary policy support.”

Accordingly, it reaffirmed its commitment to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that its 2% inflation target is sustainably achieved. Based on the Bank’s latest projection, this is now expected to happen “some time” in the second half of 2022.

In the meantime, the Bank says it will continue its QE program to keep interest rates low across the yield curve.

The bottom line

Although the Bank’s Monetary Policy Report admits that achieving full recovery will take time, and the impacts of the pandemic remain uneven, its assessment of the strength and durability of the recovery has changed for the better and will continue to evolve this spring depending on the course of COVID-19.

  • Apr 21, 2021. First National Financial LP

Greater Vancouver Home Sales and Listings Market Report

General Robyn McLean 20 Apr

Always great insight from Kevin Skipworth from Dexter & Associates.  

“Never lose hope. Storms make people stronger and never last forever.”

Roy T. Bennet

Sales and listings stats are attached as of April 15, 2021. While the beat carries on, the tune is a little different this month. Perhaps the volume has come down a little on Greater Vancouver’s real estate market. Given marginal increases in interest rates, significant increases in COVID-19 cases and more restrictions imposed, it shouldn’t be a surprise to see attention drawn away from how high to offer while in competition for a home. And listings continue to come on market in abundance, finally adding to the active listing count which is up to 10,301 from when we had 9,467 at mid-month in March.

So far there have been 4,078 new listings in Greater Vancouver – while slightly off the pace of March at mid-month, it will likely be over 8,000 for a second month in a row and only the second time on record. So, while there are more properties available, where that growth has occurred confirms the multifamily strata market continues to pick up steam this month – in some areas, but not all. And mostly in the townhouse segment of the market.

Active listings for detached houses have grown by 19% in the last 30 days while attached listings (townhouses and condos) are down 1% in the last 30 days. Active listings for detached houses in Vancouver’s East Side are up 28%; while active listings for attached properties are up 2%. In Vancouver’s West Side, the number of active listings for detached houses is up 26% while the number of attached active listings is up 3.5%. Total detached homes in Whistler are down 21% in the last 30 days though as there continues to be a push for space and less density. Looking at the absorption of new listings so far in April, the sales to listings ratio for detached houses is at 50% while at 69% for townhouses and 68% for apartments. New listings for the latter two are being consumed quicker.

So far there have been 2,402 properties sold in Greater Vancouver in April, which similarly to the pace of new listings, is off from the mid-point of March when there were 2,663 properties sold at that time last month. Will we reach over 5,000 for the second month in a row? If all things are equal to the first two weeks of the month, we’ll need a strong push to get there. But there has been nothing usual about real estate during this last year, so stay tuned. Even if we don’t reach 5,000 sales, it still may be a record for the total number of sales and new listings in the month of April. With more listings that could fuel more sales – as demand continues to be strong. With a potential increase to the qualifying rate for mortgages i.e. the stress test, buyers may be on the hunt to purchase before this change potentially comes into place on June 1st.

Some notable numbers so far in February: North Vancouver sales so far in April are keeping pace with March but more so because of townhouses and apartments which are on pace to be ahead of March sales, Port Moody townhouses and condos are on pace to exceed total sales in March and so far, the sales to listings ratio for apartments in Port Moody are at 100% – a more affordable product being taken up by strong demand. The number of new listings in Ladner and Tsawwassen are on pace to be significantly less compared to March – once again starving an already significantly undersupplied market.

Here’s a summary of the numbers:

Greater Vancouver – 2,402 units sold at mid-month in April 2021 compared to 2,663 units sold at mid-month in March 2021, 564 sold at mid-month in April 2020 and 856 sold at mid-month in April 2019. Total new listings so far in April are 4,078 compared to 4,267 at this point in March 2021 and 1,105 at this point in April 2020. Total active listings are at 10,301 compared to 10,027 at this time last year and 9,467 at mid-month in March 2021. Sales to listings ratio is at 59% compared to 62% at March 15, 2021.

Vancouver West – 369 units sold at mid-month in April 2021 compared to 394 units sold at mid-month in March 2021, 96 sold at mid-month in April 2020 and 154 sold at mid-month in April 2019. Total new listings so far in April are 767 compared to 736 at this point in March 2021 and 196 at this point in April 2020. Total active listings are at 2,273 compared to 1,726 at this time last year and 2,059 at mid-month in March 2021. Sales to listings ratio is at 48% compared to 49% at March 15, 2021.

Vancouver East – 263 units sold at mid-month in April 2021 compared to 304 units sold at mid-month in March 2021, 58 sold at mid-month in April 2020 and 94 sold at mid-month in April 2019. Total new listings so far in April are 537 compared to 500 at this point in March 2021 and 124 at this point in April 2020. Total active listings are at 1,174 compared to 830 at this time last year and 981 at mid-month in March 2021. Sales to listings ratio is at 49% compared to 61% at March 15, 2021.

North Vancouver – 232 units sold at mid-month in April 2021 compared to 205 units sold at mid-month in March 2021, 48 sold at mid-month in April 2020 and 71 sold at mid-month in April 2019. Total new listings so far in April are 338 compared to 356 at this point in March 2021 and 89 at this point in April 2020. Total active listings are at 610 compared to 622 at this time last year and 547 at mid-month in March 2021. Sales to listings ratio is at 69% compared to 58% at March 15, 2021.

West Vancouver – 54 units sold at mid-month in April 2021 compared to 70 units sold at mid-month in March 2021, 13 sold at mid-month in April 2020 and 27 sold at mid-month in April 2019. Total new listings so far in April are 147 compared to 153 at this point in March 2021 and 43 at this point in April 2020. Total active listings are at 528 compared to 573 at this time last year and 480 at mid-month in March 2021. Sales to listings ratio is at 37% compared to 46% at March 15, 2021.

Richmond – 318 units sold at mid-month in April 2021 compared to 359 units sold at mid-month in March 2021, 78 sold at mid-month in April 2020 and 80 sold at mid-month in April 2019. Total new listings so far in April are 513 compared to 555 at this point in March 2021 and 109 at this point in April 2020. Total active listings are at 1,490 compared to 1,380 at this time last year and 1,402 at mid-month in March 2021. Sales to listings ratio is at 62% compared to 65% at March 15, 2021.

Burnaby East – 26 units sold at mid-month in April 2021 compared to 32 units sold at mid-month in March 2021, 7 sold at mid-month in April 2020 and 10 sold at mid-month in April 2019. Total new listings so far in April are 53 compared to 62 at this point in March 2021 and 16 at this point in April 2020. Total active listings are at 118 compared to 99 at this time last year and 103 at mid-month in March 2021. Sales to listings ratio is at 49% compared to 52% at March 15, 2021.

Burnaby North – 146 units sold at mid-month in April 2021 compared to 150 units sold at mid-month in March 2021, 18 sold at mid-month in April 2020 and 37 sold at mid-month in April 2019. Total new listings so far in April are 255 compared to 235 at this point in March 2021 and 56 at this point in April 2020. Total active listings are at 518 compared to 386 at this time last year and 483 at mid-month in March 2021. Sales to listings ratio is at 57% compared to 64% at March 15, 2021.

Burnaby South – 126 units sold at mid-month in April 2021 compared to 158 units sold at mid-month in March 2021, 29 sold at mid-month in April 2020 and 33 sold at mid-month in April 2019. Total new listings so far in April are 221 compared to 232 at this point in March 2021 and 48 at this point in April 2020. Total active listings are at 597 compared to 457 at this time last year and 541 at mid-month in March 2021. Sales to listings ratio is at 57% compared to 68% at March 15, 2021.

New Westminster – 102 units sold at mid-month in April 2021 compared to 113 units sold at mid-month in March 2021, 37 sold at mid-month in April 2020 and 56 sold at mid-month in April 2019. Total new listings so far in April are 153 compared to 171 at this point in March 2021 and 45 at this point in April 2020. Total active listings are at 353 compared to 336 at this time last year and 348 at mid-month in March 2021. Sales to listings ratio is at 67% compared to 66% at March 15, 2021.

Coquitlam – 159 units sold at mid-month in April 2021 compared to 207 units sold at mid-month in March 2021, 46 sold at mid-month in April 2020 and 77 sold at mid-month in April 2019. Total new listings so far in April are 307 compared to 335 at this point in March 2021 and 93 at this point in April 2020. Total active listings are at 653 compared to 696 at this time last year and 597 at mid-month in March 2021. Sales to listings ratio is at 52% compared to 62% at March 15, 2021.

Port Moody – 71 units sold at mid-month in April 2021 compared to 71 units sold at mid-month in March 2021, 10 sold at mid-month in April 2020 and 25 sold at mid-month in April 2019. Total new listings so far in April are 87 compared to 102 at this point in March 2021 and 28 at this point in April 2020. Total active listings are at 165 compared to 199 at this time last year and 149 at mid-month in March 2021. Sales to listings ratio is at 82% compared to 70% at March 15, 2021.

Port Coquitlam – 83 units sold at mid-month in April 2021 compared to 90 units sold at mid-month in March 2021, 22 sold at mid-month in April 2020 and 31 sold at mid-month in April 2019. Total new listings so far in April are 232 compared to 155 at this point in March 2021 and 37 at this point in April 2020. Total active listings are at 232 compared to 189 at this time last year and 195 at mid-month in March 2021. Sales to listings ratio is at 61% compared to 58% at March 15, 2021.

Ladner – 39 units sold at mid-month in April 2021 compared to 53 units sold at mid-month in March 2021, 6 sold at mid-month in April 2020 and 15 sold at mid-month in April 2019. Total new listings so far in April are 46 compared to 63 at this point in March 2021 and 17 at this point in April 2020. Total active listings are at 115 compared to 171 at this time last year and 101 at mid-month in March 2021. Sales to listings ratio is at 85% compared to 84% at March 15, 2021.

Tsawwassen – 39 units sold at mid-month in April 2021 compared to 49 units sold at mid-month in March 2021, 14 sold at mid-month in April 2020 and 9 sold at mid-month in April 2019. Total new listings so far in April are 62 compared to 62 at this point in March 2021 and 20 at this point in April 2020. Total active listings are at 177 compared to 210 at this time last year and 159 at mid-month in March 2021. Sales to listings ratio is at 63% compared to 79% at March 15, 2021.

Trudeau Opens the Spigots for Social Spending, Income Support, and a Green Economy

General Robyn McLean 20 Apr

A review of the proposed Federal Budget by Dr. Sherry Cooper, Chief Economist at Dominion Lending.

Chrystia Freeland’s First Budget is As Promised
In more than two years, the first federal budget extends Ottawa’s COVID-19 “lifeline” for workers and struggling businesses another few months as it aims to pull Canada through the pandemic once and for all. Clocking in at a bulky 724 pages, this is a highly detailed budget that sets the stage for post-pandemic policy in Canada.Finance Minister Chrystia Freeland’s first crack at a budget plan is also widely viewed as a pre-election platform with more than $100 billion in new spending over the next three years targeting a wide variety of voters, from seniors and their caregivers to parents and business owners.

The government will need to get at least one opposition party to support it to avoid a pandemic election this spring. Much of the redistributive ‘investments’ and social spending is right up the NDP’s alley, so that should be no problem.

Canada’s net debt is now over $1 trillion for the first time, after a $354 billion deficit for the pandemic year just over. It is expected to keep climbing with deficits of $155 billion this year and $60 billion in 2022-23.

That is driven in part by more than $100 billion in new spending over the next three years, including costs to maintain federal wage and rent subsidies and aid for laid-off workers, until September now, instead of cutting them off in June.

Freeland is also looking ahead to the post-pandemic Canada the Liberals want to see, one with $10-a-day childcare, the ability to produce its own vaccines, national long-term care standards and small- and medium-sized businesses equipped with the workers and technology they need to survive.

It also includes a greener, cleaner Canada, with a promise of more than $17 billion in climate change programs, much of it in the form of incentives to encourage heavy industry to curb their emissions and grow Canada’s clean technology sector.

All of it comes with a pandemic-sized asterisk that things could still change drastically if vaccine supplies are delayed, or they prove not to work that well against emerging variants of the virus. The budget includes alternative scenarios that show where the fiscal picture might go if the worst-case scenarios of the pandemic play out.

Those risks seem even more real as the country is battling the worst wave of the pandemic yet with record hospitalizations and patients in critical care and doctors and nurses repeatedly warning of a health care system on the brink of collapse.

The debt-to-GDP ratio will rise again to 51.2%, up from 49.0% in FY20/21 and just over 31% before the pandemic. However, this year should mark the peak for that ratio before declining below 50% by FY25/26.
Help Students and Low Wage Workers

The Budget aims to create 500,000 training and work opportunities. It pledges $2.4 billion over three years to develop skills and trades, with about 40 percent earmarked for training in sectors ranging from health care to construction.It adds on $8.9 billion more to beef up the Canada Workers Benefit in a boost to low-wage workers, who will have a higher income threshold at which their benefit starts to shrink.

Other measures include bumping the federal minimum wage to $15, pledging $300 million to programs for Black and women entrepreneurs and other underrepresented groups, and recommitting to protect gig workers through promised amendments to the Canada Labour Code.

About 300,000 Canadians who had a job before the pandemic are still out of work.

Help for Small Businesses, Tourism Industry and the Arts

The government announced extending the Canada Emergency Rent Subsidy (CERS) and Canada Emergency Wage Subsidy (CEWS) past their current June 5 deadline but added it is planning to wind them down gradually by the end of September. The government also announced a new hiring credit and some aid programs for the hard-hit tourism and arts industries. Firms that collect the CEWS will face a clawback of the aid if their executives earn more in 2021 than they did before the pandemic. A step critics said should have been taken when the subsidy first came into force in mid-2020.

The hard-hit tourism sector is also getting $500 million for a Tourism Relief Fund, to be administered by regional development agencies to help local tourism businesses recover from the COVID recession. Another $100 million is going to a marketing campaign that will encourage Canadians to visit vacation spots in this country. Never mind that they are fully booked for the rest of the year.

The budget also unveiled $200 million in spending to support major arts and cultural festivals, which will flow through regional development agencies.

The Trudeau Government Is Betting Measures Will Improve Productivity and Pay For Themselves

The government’s budget estimates its spending plan will create or maintain some 330,000 jobs next year and add about two percentage points to economic growth, part of a three-year boost from $101.4 billion in new spending over that time.

The largest contributor is almost $30 billion over five years to drive down fees in licensed daycares to reach $10 a day by 2026. That money is on top of already planned child-care spending. However, the problem is that it will take provincial buy-in as it requires a 50/50 split of the expenses. This could cause untold delays.

There is also more money for broadband infrastructure and $7 billion in cash, financing and advice to help companies adopt and invest in new technologies intended to address ongoing concerns about the country’s productivity gap.
Ottawa is trying to jump-start the jobs recovery with a new program that offsets a portion of employers’ labour costs. The Canada Recovery Hiring Program (CRHP) would run from June 6 to November 20 and cover as much as 50 percent of incremental pay to workers, whether through higher wages, more hours or new hires. The program is estimated to cost $595-million.

The labour market has mostly recovered from the pandemic. The number of employed Canadians is down by roughly 300,000, or 1.5 percent, from pre-pandemic levels. At this point, the damage is mostly confined to a handful of sectors – such as hospitality – that are curtailed by public-health measures. At the same time, employment has increased in many white-collar industries.

Housing and Real Estate

Much like past budgets, the federal government has proposed a series of measures on housing, although they are unlikely to curb the robust activity and speculation of the past year.

Canada will impose a 1% tax on the value of real estate held by foreigners if the property is left vacant, beginning in 2022. It follows foreign buyers’ taxes in British Columbia and Ontario. The move is estimated to bring in $700-million in revenue over four years, starting in 2022-23.The budget also proposes to send an extra $2.5-billion to the CMHC for various initiatives, including the construction of affordable housing units and plans to reallocate $1.3-billion for such things as the conversion of vacant offices into housing.

However, the budget was just as notable for what wasn’t there: new measures aimed directly at cooling the real estate market.

Measures For The Elderly, The Green Economy, Reduced Tax Evasion, And Luxury Taxes on Yachts, Expensive Cars…

If all goes well, and the pandemic is largely behind us by September, the government forecasts a marked drop in deficits and debt over the five-year planning horizon.

  • As a share of the economy, the fiscal track is about where it was in November, with annual deficits averaging 5.8% of GDP over five years versus 5.7%.
  • Bond issuance in 2021 will decline to C$286 billion, from C$374 billion in the previous fiscal year. The government wants to issue more than 40% of its bonds in maturities of 10-years or more, up from 15% pre-pandemic. That includes a re-opening of 50-year issues.
  • The government pledged to reduce federal debt as a share of the economy over “the medium-term” in defining its new fiscal anchor.
  • Canada plans to implement a digital services tax on tech giants at a rate of 3% of revenue. It would be effective Jan. 1, 2022, “until an acceptable multilateral approach comes into effect.” The tax is projected to raise C$3.4 billion in revenue over five years

Bottom Line

There is no plan to balance the budget, but one area of focus ahead of the budget was whether Ottawa would commit to a specific fiscal anchor. And while a precise figure was not mentioned, the budget states: “The government is committed to unwinding COVID-related deficits and reducing the federal debt as a share of the economy over the medium-term.” With the proviso that the economy recovers roughly in line with consensus expectations and that borrowing costs don’t flare dramatically higher, this suggests that the anchor is a 50% debt/GDP ratio. For the deficit, this implies a reversion to pre-pandemic levels of around 1% of GDP (or about $30 billion later in the decade). In a sense, then, the pandemic has been “paid for” by a one-time level step-up in the debt/GDP ratio from 30% to 50%.

Real Estate Sector Stresses Consumer Education and Due Diligence

General Robyn McLean 16 Apr

A really important article/statement from the Associations supporting our real estate industry. 

Real Estate Sector Associations Joint Statement Addressing Current Housing Market Trends

Joint statement:

The British Columbia housing market is currently experiencing a heightened level of activity, leading to increased competition and a trend of prospective purchasers submitting unconditional offers, at times without having financing secured. In a competitive market it’s also important that consumers continue to focus upon the due diligence associated including home inspection, insurability, and strata documents (if applicable), etc.

The British Columbia Association of the Appraisal Institute of Canada (AIC-BC), the British Columbia Real Estate Association (BCREA), the Canadian Mortgage Brokers Association of British Columbia (CMBA-BC), and the Mortgage and Title Insurance Industry Association of Canada (MTIIAC) have been watching these recent trends with concern.

A number of factors – including record-low interest rates, demand outweighing supply, and the unique societal and financial impacts brought on by the COVID-19 pandemic – have led to these current practices, which introduce increased risk for buyers and sellers alike.

Collectively, our organizations and our members – which include appraisers, REALTORS®, mortgage brokers, and mortgage insurers and title insurers – are committed to ensuring the public can continue to have full confidence in a real estate transaction.

We encourage consumers to be well-informed in their approach to any real estate transaction. We recommend seeking advice from the professionals they work with and understanding the risks associated. Our organizations are working together to share knowledge and educate our memberships about the emergent risks of the current market conditions, and to support them and their clients in mitigating this risk.

Within the real estate sector, the Real Estate Council of BC (RECBC) recently issued a press release in cooperation with the Office of the Superintendent of Real Estate (OSRE) encouraging British Columbians to be aware of potential risk and do their research before making an offer on a home.

To help amplify these efforts, the BCREA is introducing additional resources for REALTORS® including a new standard form to serve as a buyers acknowledgement of information which will add additional transparency to a real estate transaction and put additional focus upon educating the potential buyer and professional advice. We have also introduced a form guide and toolkit to support Realtors in integrating its use in transactions.

Statements:

Christina Bhalla, Executive Director, British Columbia Association of the Appraisal Institute of Canada:

“One of the core elements of a healthy and balanced real estate market is a systematic approach and commitment to reliable property valuations. An unbiased opinion of value helps consumers make informed decisions when dealing with real property matters.

AIC-BC appraisers have no vested interest in the outcome of a transaction or in the value of a subject property and must adhere to professional standards and ethics in their practice. Appraisals contain important information about the market and help to detect market manipulation, inflated prices, mortgage fraud, and other suspicious or abnormal activity. Wherever possible, a professional appraisal report should be used as a tool to help mitigate risk and to protect consumers and the economy.

Darlene Hyde, Chief Executive Officer, BC Real Estate Association:

“As a result of the current housing market conditions, Consumers are facing challenging circumstances. We understand the pressures both buyers and sellers are facing, and we encourage consumers to seek a clear understanding of the risks associated with these emerging trends by talking to your REALTOR®, and other professionals when advised. BCREA, in conjunction with the province’s ten real estate boards, are working with BC’s 23,000+ Realtors to raise awareness of these trends, their impacts and the associated risks and to support them as they continue to serve their clients.

Samantha Gale, Chief Executive Officer, Canadian Mortgage Brokers Association – British Columbia:

“Purchasers who enter into unconditional offers without sufficient committed financing to complete their purchase risk losing their deposit and being sued for damages if they are unable to complete. Purchasers may experience challenges in obtaining financing in a rapidly escalating real estate market due to the property appraising lower than the contract price, not being able to secure property insurance or not qualifying for the necessary financing, which has become more onerous during the COVID-19 pandemic. We urge prospective purchasers to speak to a mortgage broker as soon as possible to obtain appropriate financing advice.”

Tightening the Stress Test

General Robyn McLean 13 Apr

More on the proposed increase in the stress test for conventional buyers from our friends at First National.

Canada’s unrelentingly hot housing market has led to increasing calls for government to step in and pour some cold water on the situation.

The country’s main banking regulator has heard those calls and has announced it will revisit a past policy that helped things cool off the last time the market caught fire.  The Office of the Superintendent of Financial Institutions is proposing a plan to make the financial stress test for home buyers tougher.

To quickly review: The stress test was implemented in 2018 as part of revised home borrowing requirements known as the B20 guidelines.  The stress test requires home buyers to qualify for an uninsured mortgage (usually one with more than 20% of the purchase price as a down payment) at an interest rate that is 2.0% higher than their contract rate or at the Bank of Canada qualifying rate, whichever is higher.

Most buyers are now forced to qualify at the BoC’s benchmark rate of 4.79% which is significantly higher than most, real, lending rates.  OSFI, the banking regulator, proposes pushing that rate up to 5.25%.  OSFI’s main objective is to protect the financial sector, not borrowers.

Even as housing has been boosting the country’s pandemic-plagued economy, the Bank of Canada is warning, “it may also be intensifying housing market imbalances and household indebtedness.”

“The evidence presented here generally suggests these vulnerabilities have increased in recent months,” the Bank said in an analytical note.

New mortgages to highly-indebted households are also rising sharply, according to the BoC.

OSFI plans to have the new, higher, qualifying rate take effect on June 1st.  Many market watchers expect that will trigger an even more frenzied spring home buying season across the country, as buyers look to “get in” before they are blocked out, or priced out, of the market.

  • Apr 12, 2021
  • First National Financial LP

7 Reasons You Should Use a Buyer’s Agent

General Robyn McLean 10 Apr

Some valuable tips for buyers from our friends at REW …in my opinion, you should ALWAYS have your own realtor when buying a home but most importantly in a seller’s market such as ours. Here’s why…

By Justin Kerby Apr 8, 2021

Purchasing a home is a significant life event, and having a buyer’s agent represent you throughout the process is highly beneficial. Seller’s agents are solely focused on representing the best interests of the seller, so having someone on your side of the transaction that you can trust is a great way to protect your own interests.

If you’ve been considering buying a home without professional representation, or are curious about the benefits of working with a buyer’s agent, take a look at these seven reasons you should use a buyer’s agent.

1. Inventory advantages

A buyer’s agent can help you navigate through a sea of inventory and narrow down your home search to find a property that best fits you and your family. Agents are equipped with tools and strategies to access inventory and provide you with a list of potential homes within your budget and area of interest. They’ll also ensure that the properties they present you with have enough space for you and come with any must-have amenities or features that suit your tastes. Take advantage of the time a buyer’s agent can save you and trust them to present you with a list of options to evaluate and consider.

An agent’s inventory expertise is even more useful should you find yourself buying in a seller’s market when inventory is limited, and homes are moving quickly. A reliable real estate agent is invaluable in a hot market.

2. Local knowledge

Working with a buyer’s agent who understands the area you’re interested in moving to or staying in will make the home buying process much more enjoyable for you. Agents know the ins and outs of the areas they represent and can help you identify up-and-coming neighbourhoods, good investment opportunities, quiet parts of town, busy parts of town – whatever is important to you. Make a list of your wants and needs and go over them with your buyer’s agent. No piece of information is too small.

Buyer’s agents can also help introduce you to local contractors and service providers should you need any assistance throughout or after the home buying process. Agents have large networks of trusted contacts ready to help you every step of the way, from notaries and home inspectors to plumbers and landscapers.

3. Experienced market analysis

Submitting an offer is a challenging task. Understanding current market conditions, recent sales in the area, and the sellers’ motivations all play a role in writing a solid offer. Agents can conduct a market analysis on your behalf that studies the active listings and recently sold comparables, allowing you to analyze and reflect on recent trends.

Slow markets can put buyers in a position to offer less with more subjects, while the opposite is true of a hot housing market. Your buyer’s agent will have experience in all kinds of markets and can help guide you to an offer that will be taken seriously without stretching you beyond your comfort zone.

4. Help with subjects and conditions 

One of the most important things that first-time homebuyers need to know is the subject removal process and what conditions should be included in your offer. Working with a real estate professional ensures that you have an expert on your side who is looking out for your best interests. A buyer’s agent will help you submit conditions that keep you safe and protected when you make any offers.

The sale will only be final once your conditions have been met within a set timeframe. Talk to your agent about the options available and work with them to submit subjects or conditions that protect your interests. This will give you peace of mind throughout any inspections or while you secure financing.

5. Negotiation skills

Good agents are good negotiators, and having your buyer’s agent conduct negotiations with the seller’s agent is in your best interest. An experienced agent understands leverage, when and where to use it, and how certain conditions can be used in your favour. Agents also benefit from having conducted dozens if not hundreds of similar negotiations, which means that they understand the process and all of its potential challenges. In such a high-value negotiation, trust someone that knows the ropes.

If you’re evaluating agents, ask about their experience representing buyers and request past examples of their successful negotiation efforts. This will help give you confidence that you have a skilled negotiator as your representative.

6. Take care of the unknown

Agents are a wealth of knowledge, not just on inventory and market analysis but also on less frequently broached topics. Agents have an understanding of the industry that is well beyond the average home buyer or seller, and they can often point out potential pitfalls or roadblocks before they come up. It all comes down to experience, which is one of the most important things you should look for in a real estate agent. Experience can help you estimate any closing costs or additional fees you may not have considered, spot any potential neighbourhood issues, and help you come out on top should you be contending for a property with other competing offers. Sometimes the task that a buyer’s agent will help you with the most is one you didn’t anticipate.

7. It’s no cost to the buyer

It may come as a surprise to many first-time homebuyers, but it’s true. As a buyer, you won’t have to pay any real estate commission to your agent.

It works like this: when a home is listed, the seller and their agent enter into a listing agreement.  The agreement pre-determines the buyer agent’s commission, which the seller pays. In almost all cases, working with a buyer’s agent is of no cost to you – it’s entirely free.

Working with a buyer’s agent has significant advantages over buying a home without professional representation, so finding a great real estate agent should be a top priority. Start interviewing agents before you begin your home buying journey. Having a good agent will help you from day one all the way until possession day.

 

Blockbuster Canadian Jobs Report for March

General Robyn McLean 9 Apr

More on the current economic recovery from Dr. Sherry Cooper, Chief Economist at Dominion Lending.
Blowout Canadian Job Growth Continued In March
This morning, Statistics Canada released the March 2021 Labour Force Survey showing much stronger-than-expected job growth for the second month in a row, pointing towards a Q1 growth rate of more than 5.5%. This survey reflected labour market conditions during the week of March 14 to 20, when public health restrictions were less restrictive in several provinces than during the prior month.

Employment surged by a whopping 303,100 in March after a gain of 259,200 in February. The jobless rate fell to 7.5%, the lowest since before the pandemic. However, there remain many discouraged workers who are no longer actively looking for jobs but would prefer to be gainfully employed. Many of them might well be mothers who could not afford or find quality daycare or needed to help children with remote learning.

The employment rate–the percentage of the population aged 15 and older that is employed—increased 0.9 percentage points to 60.3%, which was still 1.5 percentage points below the rate seen in February 2020.
Employment gains in March were spread across most provinces, with the largest increases in Ontario, Alberta, British Columbia and Quebec. Much of the employment increase reflected a continued recovery in industries—including retail trade and accommodation and food services—where employment had fallen in January in response to public health restrictions. Growth in health care and social assistance, educational services, and construction also contributed to the national increase in March.

The COVID-19 pandemic continues to impact the labour market. Compared with February 2020, there were 296,000 (-1.5%) fewer people employed in March 2021 and 247,000 (+30.4%) more people working less than half of their usual hours. The number of workers affected by the COVID-19 economic shutdown peaked at 5.5 million in April 2020, including a drop in employment of 3.0 million and an increase in COVID-related absences from work of 2.5 million.
Among workers who worked at least half their usual hours in March, the number working at locations other than home increased by about 600,000 for the second consecutive month as public health restrictions eased across the country.While the number of Canadians working from home declined by 200,000 in March, working from home remains an important adaptation to the COVID-19 pandemic. Of the 5.0 million Canadians working from home in March, more than half (2.9 million) were doing so temporarily in response to COVID-19.

Total hours worked rose 2.0% in March, driven by gains in several industries, including educational services, retail trade, and construction. Building on a steady upward trend since April 2020, this brought total hours to within 1.2% of February 2020 levels. Hours worked among the self-employed continued to be much further behind (-7.7%) February 2020 levels, while hours among employees returned to pre-pandemic levels.

The unemployment rate falls to the lowest level since the start of the pandemic

The unemployment rate declined for the second consecutive month, falling 0.7 percentage points to 7.5% in March, the lowest since February 2020. This reflected strong employment growth that exceeded the number of people entering the labour market.

The number of people unemployed fell 148,000 (-8.9%) in March, with the majority (59.0%) of people leaving unemployment becoming employed. Despite sharp reductions in both February and March, the number of people unemployed stood at 1.5 million, up 371,000 (+32.4%) compared with February 2020.

The number of long-term unemployed—people who had been looking for work or on temporary layoff for 27 weeks or more—held steady in March. There were 286,000 (+159.5%) more people in long-term unemployment compared with February 2020. These are the folks that could be permanently scarred by the pandemic and for whom job training may well be helpful.
Bottom Line 

While Friday’s jobs report surprised on the upside, there are still concerns around an uneven recovery and the impact of the third-wave shutdown in the economy. As the virus becomes more contagious and lethal, the economic recovery remains at risk, heightened by the vaccine’s very slow rollout. The reduces the importance of this employment report for the Bank of Canada even though it is the last report before the central bank’s April policy decision. No doubt the Bank of Canada will highlight the rising risk of contagion on the economic recovery.

Prime Minister Justin Trudeau’s government will release its 2021 budget on April 19 and has already promised an additional spending dose. The Bank of Canada’s next policy decision is on April 21. The Bank will thus maintain the overnight rate at 25 basis points and refrain from tapering quantitative easing.

OSFI Considers Setting a Minimum Qualifying Rate of 5.25% For Uninsured Mortgages

General Robyn McLean 8 Apr

Additional insight on the OSFI proposal to raise the qualifying rate on conventional mortgages – from Dr. Sherry Cooper, Chief Economist at Dominion Lending. 

Banking Regulator Aims To Make It Tougher To Get An Uninsured Mortgage
With several Big-Five bank CEOs calling for regulatory action to slow the red-hot housing market, it didn’t take long for the Office of the Superintendent of Financial Institutions (OSFI), the governor of federally regulated financial institutions, to respond. In a news release issued today, OSFI proposed an increase in uninsured mortgages’ qualifying rate to the higher of the mortgage contract rate plus 200 basis points or 5.25% as a minimum floor.

Based on posted rates of the country’s six largest lenders, the current threshold is at 4.79%. Before the pandemic, the posted rate was widely considered too high relative to much lower contract rates. Remember, Canada’s six largest lenders under OSFI’s jurisdiction set the posted rate each week when they submit to the Bank of Canada the so-called ‘conventional 5-year mortgage rate’. It has increasingly born little relationship to actual contract rates.

OSFI, once again, shows itself to cozy up to the Canadian banking oligopoly. Keep in mind that delinquency rates on the Canadian banks’ mortgage books are very low–both in historical terms and compared with financial institutions in the rest of the world. OSFI couched this proposal in terms of “the importance of sound mortgage underwriting.”

In the release, OSFI said, “The minimum qualifying rate adds a margin of safety that ensures borrowers will have the ability to make mortgage payments in the event of a change in circumstances, such as the reduction of income or a rise in mortgage interest rates. As mortgages are one of the largest exposures that most banks carry, ensuring that borrowers can repay their loans strongly contributes to the continued safety and soundness of Canada’s financial system.”

The comment period ends on May 7. OSFI reported that they would communicate the revised B-20 Guideline by May 24, with an implementation date of June 1, 2021.

This all but ensures that the current boom in home buying will accelerate further in the spring market–providing an impetus for borrowers to get in under the June 1 deadline. OSFI’s move will trigger an even hotter spring housing market as demand is pulled forward just as it was before the January 1, 2018 implementation date of the current B-20 ruling.

This will not impact non-federally regulated FI’s such as credit unions, mono-lines and private lenders, nor does it immediately impact insured-mortgage borrowers.

The federal government is in charge of mortgage qualification for insured mortgages. CMHC and the finance department could well follow OSFI’s lead in tightening qualifying rules for insured loans.

Bottom Line

It is noteworthy to remember that on January 24, 2020, OSFI indicated that it was reviewing the benchmark rate (or floor) used for qualifying uninsured mortgages. At that time, the thought was that the widening gap between the posted rate and the contract mortgage rate was too large and that OSFI and the Bank of Canada would publish a mortgage rate weekly that would better reflect the contract rates. The new qualifying rate would be that contract mortgage rate plus 200 basis points. This consultation was suspended on March 13, 2020, in response to challenges posed by the COVID-19 pandemic.

Marketing Cooling Measures on the Horizon!

General Robyn McLean 8 Apr

Important update that could affect conventional home buyers by June 1st, 2021.

OSFI consultation on the stress test

Today the Office of the Superintendent of Financial Institutions (OSFI) restarted its consultation on the minimum qualifying rate for uninsured mortgages and re-emphasized the importance of sound mortgage underwriting.

The new proposal for the qualifying rate for uninsured mortgages is the higher of the mortgage contract rate plus 2% or 5.25% as a minimum floor. Additionally, OSFI announced a proposal to revisit the calibration of the qualifying rate at least once a year to ensure it remains appropriate for the risks in the environment.

A strong financial system that is able to support Canadians in today’s environment will be critical to Canada’s post-pandemic economic recovery. The current Canadian housing market conditions have the potential to put lenders at increased financial risk. OSFI is taking proactive action at this time so that banks will continue to be resilient.

The minimum qualifying rate adds a margin of safety that ensures borrowers will have the ability to make mortgage payments in the event of a change in circumstances, such as the reduction of income or a rise in mortgage interest rates. As mortgages are one of the largest exposures that most banks carry, ensuring that borrowers are able to repay their loans strongly contributes to the continued safety and soundness of Canada’s financial system.

OSFI is seeking input from interested stakeholders on this proposed qualifying rate by email to B.20@osfi-bsif.gc.ca before May 7, 2021. OSFI will communicate final amendments to the qualifying rate for uninsured mortgages in Guideline B-20 by May 24, 2021, with a coming into force date of June 1, 2021.

Potential Immigration, the wild card in Metro housing market

General Robyn McLean 6 Apr

A great review of the March Greater Vancouver Home Sales and Listings Market Report by my friends at Dexter Realty. Always insightful and informative…

Potential Immigration the wild card in Metro housing market

“We cannot solve our problems with the same thinking we used when we created them.”

Albert Einstein

March housing sales skyrocketed more than 126% higher than in March 2020 – the month the COVID-19 pandemic began – to the highest monthly sales pace ever recorded in Greater Vancouver.

The composite benchmark home price leaped 9.9% in March from a year earlier and detached house prices surged nearly 18% higher to all-time high of $1.7 million.

The unprecedented action of 5,843 sales in the month – more than 174 sales every day – blew past housing forecasts and eclipsed the former all-time sales record set in March of 2016, long recognized as the peak year for housing sales in the region.

Dexter agents have been running on the frontline of the current pace, and we are detecting some buyer fatigue, which is understandable. This market can’t continue at this level forever and, as we’ve seen in previous years, March can be the high point of the year for housing sales.

There could be some truth in that theory, but this year and this market is consistently shattering all the traditions.

We believe there is one wild card yet to be played and it could shift the housing market into hyperdrive later this year. This is a potential rebound of international buyers and immigration, which were credited for sparking high home sales in the mid-1980s and in 2016-18 and could do so again in 2021.

In March of 2020 foreign buyers accounted for 24 residential property transactions in Metro Vancouver, despite the provincial 20% tax on homes. But, after COVID-19 travel restrictions hit, that dropped to single-digits per month. We believe pent-up demand and a war chest is building and it could be unleashed on the Vancouver-area housing market later this year.

For instance, according to recent report from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), $43.6 billion was transferred from troubled Hong Kong to Canada in 2020, and this, FINTRAC said, does not include transfers via cryptocurrencies, between financial institutions, or transfer under $10,000.

As well, Canada was posting the highest population growth in the developed world prior to COVID-19, according to Statistics Canada, with its 1.4% annual growth rate in 2019 more than twice as high as the U.S. and Great Britain, which tied for second place. The Canadian government has increased its annual immigration quota to 400,000 people per year. The inflow has been stalled by the pandemic but when that ends the rush into Canada will begin. Wild as the current Metro Vancouver market is right now, it may be the calm before the storm.

And with some calls to cool the market, and concern over low interest rates creating challenges when rates do eventually rise, we have to remember that Canada has one of the soundest lending practices in the world and with the current Stress Test in place, buyers are qualifying at rates much higher than we are seeing in the market place right now. So, while demand side measures are easy for governments to tinker with and implement, supply side realities need to be a focus or this rush of demand will once again be pushed into the future and create challenges yet again.

Greater Vancouver: There was a welcome uptick in new listings in March compared to a year earlier, but the new arrivals were not enough to match buyer demand. Listings for detached houses increased 122% from March 2020, but sales increased 124% Townhouse listings were up by 122%, but that was nearly matched by the 112% increase in sales. In the condominium market, 64% more apartments were added to the market compared to a year earlier, but March sales surged 128% higher.

Despite a record-high benchmark price of $1,700,200, detached houses led the March market, accounting for 34% all transactions, compared to a 46% share by the condominium sector. Townhouse buyers accounted for only 19% of the market, but this is partially due to a severe lack of inventory. As of March there was only a one-month supply of townhouses in all of Greater Vancouver. This resulted in multiple offers that drove benchmark townhouse prices in March up 10.4% from a year earlier and nearly 5% higher than in February 2021, to $872,000, a record high.

As we predicted last month, strata sales are ramping up, led by condominium apartments which continue to represent the most affordable housing option. With the benchmark condo price rising an average of 3% per month since last October, it reached $715,800 in March, also an unprecedented high.

Vancouver Westside: The price of a Vancouver Westside detached house in March was $3,286,200. That is up nearly 4% , or about $131,000, from the start of this year, but benchmark detached prices are still 5% below what they were in 2018, so there appears room for further appreciation. There were 148 detached sales in March, which was up from 87 in February and 108 in March 2020. Sales of townhouses in March were very strong, with the 108 sales more than double the 56 sold in the same month last year. The townhouse price reflects this, at a median of $1,550,000 in March, it was nearly $200,000 higher than a month earlier. Wow. The real action was in the condo market, however. With 628 transactions in March – by far the highest of any Metro Vancouver community – the median price spiked to $816,700, up 7.5% , or about $61,000, from January 1 2021.

As an aside, anyone interested in Point Grey real estate should plan to attend a series of public sessions on the development of the 90-acre Jericho Lands ( bound by West 4th Avenue, Highbury Street, West 8th Avenue, and West Point Grey Park) that will run from April 10-19 and outline plans for the biggest residential development in recent Westside history. Register through shapeyourcity.ca

Vancouver East Side: Vancouver’s East Side is seeing an acute shortage of housing, and the entrenched NIMBYism in key SkyTrain-served neighbourhoods will likely keep the supply in check. In March, for instance, there were 384 listings for East Side condos but there were 313 sales, or 82% of all the listings. There is now less than a one-month supply. A major developer has issued a proposal to build 520 condos in three towers on the old Safeway site across from the Commercial-Broadway SkyTrain station but it has already been met with protests. It will be years, before supply matches demand, which points to further increases in East Side condo prices, which were already 3% higher, year-over-year, in March to $619,000.

The townhouse supply is even tighter. Only 11 new townhouses are under construction in East Vancouver and, in the first three months of this year there were just 348 listings of resale townhouses and 68% of them sold. As a result, the median townhouse price reached $1,210,000 in March, the highest level in history. Median detached house prices on the East Side in March hit $1,780,000 as sales more than doubled from a year earlier, to 244 transactions, which, incidentally, is 40% higher than on the neighbouring Westside.

North Vancouver: About 63% of all new listings for detached houses in North Vancouver in March sold, a clear seller’s market, with the benchmark price tracking 19.4% higher from a year earlier to $1,853,000, and up 8.8% from the start of the year.

Townhouse sellers were often dealing with multiple offers in March, a reflection of low supply and high demand, which drove the benchmark price of the 87 sales to $1,075,000, up nearly 10% from a year ago. North Vancouver has a total of 2,863 under construction, but reports show that the inventory of complete and unsold condos was just 25 units available as of March 1. A big new project is underway just west of the Lonsdale Quay, but it will take at least a decade for those 700 new condos to complete. Meanwhile, condo sales were up 105% in March from a year earlier, to 203 transactions, but price increases are moderate, advancing 5.2%, year-over-year to a benchmark of $615,200.

West Vancouver: Detached houses are dominant in exclusive West Vancouver, where the benchmark price for a detached house in March was $3,043,400, up a startling 19.2% from March of last year, a cash increase of more than $540,000. Detached house sales increased 139% from March 2020, to 98, which was more than townhouse and condo sales combined.

Sixteen townhouses sold in March, while 32 condo apartments transacted at a benchmark of $1,143,300, up 11% from the same month last year. This is a sustained seller’s market with the supply of total residential listings is down to 3 month’s supply in March.

Richmond: There is now only a 2-month inventory of total residential units on the Richmond market after sales surged 128% in March from the same period last year, to 786 transactions.

Price increases have been dramatic. The median price of a detached house sold in March was $1,850,000, up nearly $100,000 from a month earlier and $250,000 higher than in March of last year. History has shown that Richmond attracts more buyers from abroad than nearly any other market in Metro Vancouver, so we expect detached prices will continue to accelerate when borders open up, because the 106% year-over-year March surge in new listings is not enough to meet demand. Condominiums, which dominated the Richmond market with 384 sales in March, have seen relative price stability with median prices advancing 6.7% year-over-year to $588,000. But, with a sales-to-new-listing ratio of 74% in March, condos are in a strong seller’s market with multiple offers being seen.

Burnaby East: One of the more affordable markets in Greater Vancouver is seeing intense buyer demand, with total sales up 159% in March compared to a year earlier, the highest increase in Burnaby. Even with a 58% increase in new listings in March, there were just 100 total homes for sale in the community, or about a 1-month supply as of month’s end. The sales-to-listing ratio is running at 69%, which means the supply is dwindling in a seller’s market and prices are rising. If you are a detached-house owner in Burnaby East and have considered listing, now may be a prime time to come to market. The benchmark price of a house was $1,380,700 million in March, up nearly 5% or about $65,000, from a month earlier.

Burnaby North: The final major-brand retailers are moving into the recently completed Brentwood shopping centre development, where thousands of new condominiums have already been built. The massive mixed-use project has spurred demand for all types of homes in the area, with total sales up 158% in March from a year earlier and 74% higher than in February. The large inventory of condominiums – 237 new listings in March – has kept price increases restrained. The benchmark condo price is now $637,600 – about $50,000 below the Lower Mainland average – but with 84% of listings selling in March and most of the new Brentwood condo towers complete, condo values are forecast to increase.

Burnaby South: If you have driven through Metrotown recently you have seen the incredible construction pace that now defines the future of Burnaby’s official downtown. The blast radius of the development is apparent in the sale prices of both detached houses – which have been rising by 7.4% month-over-month this year and reached $1,696,200 in March – and townhouses, where the benchmark price is up 6.6% from a year ago to $819,000. Burnaby South is also as one of the hottest condo sales markets in the Lower Mainland, yet condo price increases are relatively stable, still 6.1% below the 2018 peak at $682,700 as of the end of March. This may represent an opportunity for condo investors.

New Westminster: Condominium investors, I hate to say, will want to keep an eye on condo rentals in the Royal City. On March 30, the city won a BC Supreme Court ruling that cements B.C.’s first bylaw that allows retroactive rezoning of condos to rental units in six specific rental buildings. So far about 270 units are affected, but there is no guarantee the bylaw won’t be extended. This may explain a 54% increase in condo listings in the first three months of this year compared to the same period in 2020, including 209 new listing in March. We expect condo listings to increase, which should keep the current median price of $547,200 from increasing dramatically. Detached house prices in New Westminster, meanwhile, were up 14.4% in March from a year earlier to $1,230,000, with the sales-to-listing ratio at 51%, reflecting a modest seller’s market.

Coquitlam: There is a plan that owners of older stratas and detached houses in Coquitlam should be aware of as the vaccine rollout brings an end to the pandemic. This is the developer demand for property that can be developed into higher density residential, either aging strata projects on large lots or houses that can be drawn together into land assemblies. Demand waned during the pandemic but is now coming back to life, due primarily to an aggressive City of Coquitlam development strategy that covers 1,789 acres radiating from the Coquitlam Town Centre near Lougheed Highway and Pinetree Way. Any potential buyers should get up to speed on the master plan by visiting the city’s web site. (There is even a virtual-reality tour available.)

Total Coquitlam housing sales soared 129% in March compared to a year earlier, and detached houses led the price increase, up a startling 20% to $1,433,800. Townhouse prices advanced 11.2% to $757,000 and condo prices were up 6% year-over-year to $560,700.

Port Moody: Savvy owners of older townhouses in the Woodland Park area are likely watching closely as a new 23-acre planned development inches through Port Moody’s approval process.

A developer’s plan for construction of about 1,840 homes over the next decade received first reading March 24 after more than a year of discussion. Today, 19 buildings with 200 townhouses, all of built more than 40 years ago, are on the site. The land is in the 1000-1100 block of Cecile Drive near Clark Road. Owners in the surrounding area should be aware that developers could be scouting for strata windups and land assemblies, but should also be cognizant of Port Moody’s lengthy and fickle approval process. Meanwhile, total home sales in

Port Moody increased 148% in March compared to a year earlier. The median price of a detached house is now $1,193,000, up 22.5% from March 2020, while townhouse values increased 7% to $694,700, but still remain less expensive that condo apartments, which were selling for a benchmark of $697,800 in March. This reflects the many newer condos on the market, and the aging stock of existing townhouses.

Port Coquitlam: Port Coquitlam offers the lowest house prices in the Tri-City area, with a detached house benchmark price of $1,226,400 in March, up 17.2% from a year earlier. Townhouses were up by similar amount, to $753,600, while condo prices saw a more modest increase of 8% to $501,500, or about $60,000 less than in neighbouring Coquitlam. However, with a lack of new construction recently and total sales up 114% year-over-year, there is only a 1-month supply of all type of homes in Port Coquitlam and the sales-to-listing ratio is 65%, an indication of a seller’s market and potential price increases.

Pitt Meadows: The sales bloom faded slightly in Pitt Meadows in March, with total homes transactions of 53, down 5% from February and up a relatively modest 51% from March of 2020 – a reflection on the amount of total stock available with there being half a month to 1 month’s supply of homes available. Detached house prices increased markedly, however, leaping 27.4% year-over-year to a record high of $1,143,000. The sales-to-listings ratio dipped to 67% in March, down from 85% in February, as new listing increased 65% from February to 53 units. Pitt Meadows is catching a trend towards people relocating from the city to smaller, more affordable towns. In March, buyers could find townhouses for around $640,000 and condo apartments for less than $400,000. However, with an extreme seller’s market, the lower-priced units are seeing multiple offers this spring.

Maple Ridge: Even with a 157% surge in total March sales compared to March of last year and detached house prices increasing 20.7% year-over-year, Maple Ridge remains a relative bargain. Its benchmark detached house price was $1,043,900 in March, nearly $500,000 below the Lower Mainland benchmark and $700,000 less than in Greater Vancouver. Yet, multiple offers are common as the sales-to-listing ratio has been north of 80% since the start of the year. New townhouse projects are selling out fairly quickly and the resale townhouse price has spiked 18.6% from last year to $634,400. The typical condo apartment sells for $403,900, up 12.3%, year-over-year.

Ladner: The small town of Ladner in South Delta posted a 225% increase in total sales in March, to 101, compared to March of 2020, the biggest increase in the Lower Mainland. Its 23.2% increase in prices for detached houses was also one of the highest, with March ending with house prices at $1,205,800, which is about $500,000 less than Richmond, the next biggest city. There has been a lot of new strata units built in Ladner over the past year, and more to come. The supply has kept townhouse prices at a benchmark of $702,000, still 3.2% below the 2018 peak, and condo apartment values at $548,400 in March, up about 9% from a year ago but 1.4% below the price three years ago. A total sales-to-listing ratio at 74% in March, however, portends increasing prices across the board.

Tsawwassen: Tsawwassen has been largely a no-go community for developers for many years. The long-delayed Southland community for about 850 homes is slowly taking place, but no large housing projects have been built in a decade. In the 16 months to the first of March 2021 only nine homes were started, all of them rental apartments. This is reflected in the current reality, with multiple offers on the mere 166 active listings available and a sales-to-listing of 77% in March in an extreme seller’s market. The benchmark detached house price soared 21.3% year-over-year to $1,312,100 in March, and is now 112% higher than 10 years ago. Many people want to buy in Tsawwassen, which has driven townhouse prices up nearly 8% from March 2020 and condo prices up 10.8%, year-over-year, to $588,800. For investors, this sunny community is one of the hottest market for potential price appreciation in Greater Vancouver because virtually no new homes are being built.