The Vancouver residential market’s prices, sales, and supply all
suffered notable annual declines in February, according to the
latest numbers from the Real Estate Board of Greater Vancouver.
Benchmark prices across all housing types decreased by 6.1%
year-over-year in February, down to $1,016,600.
Single-detached properties experienced the greatest fall at
9.7%, reaching an average of $1,443,100.Condominium prices had a
more modest 4% drop to $660,300, and townhomes by 3.3% to end up at
Housing sales volume had a massive 32.8% annual shrinkage last
month, settling down at levels 42.5% lower than the 10-year sales
average for February, BNN Bloomberg reported.
Detached homes had 28% fewer sales in February compared to the
same time last year, while apartment activity slowed down by almost
36% during that time frame.Meanwhile, the townhome sector had a
nearly 31% decrease.
The number of new homes that entered the market fell by 7.8%
year-over-year, with the sales-to-active listings ratio ending up
Read more:Red tape
is a major influence in Vancouver’s housing scarcity
The Conference Board of Canada warned in its recent market
outlook that the Vancouver housing sector’s sluggishness will be a
major factor in the province’s economy, although fortunately not to
the pint of recession.
B.C.’s real GDP
Real estate markets in Quebec, Alberta, and Nova Scotia are
becoming increasingly popular among Chinese property buyers and
investors, according to a new analysis by Juwai.com.
“The Chinese buyer boom in Montreal began earlier and is larger
than in other second-tier cities.However, some smaller markets saw
bigger Chinese buyer booms on a relative basis during 2018,”
Juwai.com CEO and Director Carrie Law said.
All in all, Chinese-home buying intentions across Canada went up
by 8% annually in 2018, with recovery in the second half of the
year making up for a noticeable slowdown in the first six
“Buyer demand was unevenly distributed throughout the year.The
year began with buyer enquiries plummeting for two consecutive
quarters.During the first quarter, enquiries fell 23.8% compared
with the same quarter in 2017.In the second quarter, enquiries fell
20.2% compared with the second quarter of 2017,” Law explained.
“In the second half, demand reversed as Chinese buyer enquiries
returned to growth levels.Buyer enquiries climbed 43.6% during the
third quarter and by 45.1% in the fourth quarter, compared with the
same periods during the prior year.”
Canadian city contemplates foreign buyer tax
Chinese inquiries for residential purchases in Montreal grew by
35.7% year-over-year.Calgary and Halifax had considerably greater
increases of 234.4% and
Arguably the greatest risk to preconstruction condo purchases is
show suites often don’t conceal the true state of delivered
units.But a Vancouver developer has found a way around that.
Aragon Developments builds its condomniums before opening sales
to the public—a virtually unheard of way to market condos in a
major Canadian market.Developers usually have to surpass 80% sales
before they can secure financing to start building.
“It also allows buyers to go in and see the amount of work we
put into the finished quality,” said Luke Ramsay, development
coordinator at Aragon.“They see what we do acoustically or to the
finishes.They see where they’re going to live instead of a show
suite that may or may not reflect the finished product three or
four years down the line.”
Perhaps Aragon’s most unique offering can be found at two of its
condominium developments that go on sale this summer.Amber, a
31-unit building with three accompanying townhomes, and Shift, a
43-unit tower, are designed by the firm’s in-house interior design
team and promise idiosyncratic design elements.But most
importantly, they will be family-friendly.
“The suites appeal more to young families who are looking for
more bedrooms but don’t have the ability financially to afford a
big house or apartment,” said Ramsay.“Most companies start by going
A combination of a strong economy and a robust job market is
elevating the purchasing power of working-age Canadians in Montreal
and Québec City, according to a new analysis by the Canada Mortgage
and Housing Corporation.
This has become a crucial factor in keeping delinquency rates in
the 25 to 64 employment age range low.Unpaid mortgages of 90 days
or longer accounted for only 0.29% of mortgages in Montreal and
0.24% in Québec as of Q3 2018.
“The Montreal and Québec areas have shown strong economic growth
and particularly vibrant job markets in the last two years.This
certainly contributed to the financial stability of households and
supported their ability to make their mortgage payments on time (or
less than 90 days late),” CMHC said.
market’s surge continues unabated
Indeed, mortgage delinquency rates in the two markets showed
considerable stability over the 12 months ending September
In Montreal, the rate stood at 0.23% for mortgages with a value
at origination of less than $100,000, and 0.30% for accounts
involving $400,000 and greater.
On the other hand, delinquency in the Québec CMA was at 0.13%
for accounts with origination values of less than $100,000, and
around 0.63% for mortgages at $400,000 and greater.
Working-age Canadians also
In a new analysis, the Canadian Association of Insolvency and
Restructuring Professionals warned that the commercial property
segment will labour under the burden of growing consumer
“Businesses will also feel the effects of a slowdown in consumer
spending as Canadians react to the softening housing market and
adjust their household budgets to account for larger interest
payments in order to service debt,” CAIRP board member David Lewis
Construction, real estate, and rental and leasing are also
likely to disproportionately suffer from this impact.The proportion
of Canadian businesses that filed for bankruptcy in January rose by
10.1% year-over-year in January, and 2.1% from December 2018.
“After 17 consecutive years of steady decline, business
insolvencies in Canada have reached a plateau and will likely rise
in 2019,” Lewis said.
“Weaker exports, slowing job growth, tightening lending
conditions, rising interest rates and consumer debt are all
chain failures should give would-be investors pause
Crucially, the CAIRP has forecast that the number of consumer
insolvencies nationwide will continue growing over the next two
years, mainly propelled by larger, more onerous household debts.The
share of Canadians who filed for insolvency in January was 7.1%
larger than a year ago, and 11.6% greater on a month-over-month
“The rise in
Demand for industrial space in Vancouver is so voracious that
CBRE believes it could run out of land in a few years.
According to commercial real estate firm CBRE, a confluence of
e-commerce as well as Vancouver being situated between the Pacific
Ocean and mountains is resulting in surging real estate prices and
demand for warehouse space.In fact, industrial rents increased 16%
last year, to a record of $11.86 per square foot.
“There is a critical shortage of industrial land in Vancouver,”
CBRE Canada’s Vice Chairman Paul Morassutti told Bloomberg.“It was
our estimation that they could potentially, literally run out
of industrial land by the early 2020s.”
Meanwhile, in Canada’s largest city the industrial market had a
robust showing in 2018.While rents did not rise as much as
they did in Vancouver, the $7 per square foot increase, supply is
well behind demand.To finish the year, Toronto’s downtown has North
America’s lowest office vacancy rate (2.7%), and rents in the most
popular towers surged a 14%, reaching $35.37 per square foot.To
catch up to demand, a more flurry of new supply is expected,
however, the timing might be precarious as it should align with the
Commercial real estate investment kept inclining, setting a
record in 2018 when it hit $49.3 billion—68% above
British Columbia’s moderating housing market will have a domino
effect of overall weakness in the provincial economy, the
Conference Board of Canada predicted in its study released last
Some ongoing energy megaprojects might help alleviate some of
the pain, according to the analysis.Among the most promising of
these is a $40-billion project based in Kitimat, B.C.by LNG Canada
and five investment partners.
“With the housing market slowing, investor approval of LNG
Canada’s liquefied natural gas terminal and pipeline in late 2018
came at an opportune time for the province.The first phase of the
development will provide a substantial boost to the province’s real
GDP between now and the middle of the next decade,” the Board
stated in its report, as quoted by Business in Vancouver.
Nevertheless, the market should still brace for considerable
real GDP growth slowdown, with housing likely to drag down the
economy well into next year.
cooling policies still needed – B.C.Finance Minister
The Board warned that the province’s economy will shrink from
2.6% in 2018 to 2.5% this year, and then down to 2.4% in 2020.These
would be noticeably lower than the 2014-17 period, which enjoyed an
average of 3.2% growth.
Said slowdown will make itself especially felt in the largest
The growing number of tech companies taking roost in large
offices situated at major cities nationwide will ensure the
commercial market’s resiliency in the event of a recession,
according to CBRE’s Paul Morassutti.
“Tech has become so ubiquitous across Canadian industries [that]
the true impact the tech sector has on Canada’s economy has been
understated,” Morassutti said, as quoted by Real Estate News
This is quite apparent in Toronto, which is considered one of
the global leaders in high-technology innovation, particularly
research in artificial intelligence.
At present, around 10 million square feet of office space is
under construction in in the city, but around 58% of that volume
has already been pre-leased.Tech firms represented fully one-fifth
of these pre-leases, CBRE noted.
Industry movers like Microsoft are now betting on the city’s
long-term prospects, if its move into a 132,000-square-foot lease
at the new CIBC Square in downtown Toronto is any indication.
is a top commercial investment destination right now
“Tech companies anchoring new buildings is something we have
virtually never seen before,” Morassutti stated.
“Over the past 10 years, tech has grown at more than 2.5 times
the pace of the energy sector and three times the overall economy,”
he added.“In real estate,
The cement sector is the second-largest industrial emitter of
carbon dioxide, according to the International Energy Agency, and
given the building boom that’s gripped the country’s largest
cities, it is unlikely Canada will reduce emissions below 2030
However, there could be a solution.
Mass Timber technology is being touted as a solution that will
reduce carbon emissions and save consumers money.According to Erik
Andreasen, vice president of Adera Development, which has been
building exclusively with wood for 50 years in Metro Vancouver,
there are several benefits to constructing buildings with wood
instead of concrete.
“The homes are quieter than concrete and the homes are as solid
as concrete homes, but they have better performance,” he said.“Even
when it comes down to fire, our wood doesn’t burn.We perceive smart
wood to be the building technology of the future and we can compete
with concrete pound for pound, dollar for dollar, and there are a
number of benefits for customers.”
Last year, Adera finished Virtuoso, a condo project at the
University of British Columbia that uses 1,120 cubic metres of
lumber for its cross-laminated timber portion.Every cubic metre
sequesters 220 kilos of carbon, which is the equivalent of 245
tonnes of carbon dioxide.For context, the average automobile
produces 4.5 tonnes of carbon annually.
Condo supply in the country’s largest markets might see
significant increases in the near future, but on the whole, young
professionals and starting families will still prefer
single-detached homes, a Globe and Mail
politics/business columnist has argued.
While well-intentioned, a federal policy focused on boosting the
availability of low-cost condo units in downtown areas “may have
unwittingly encouraged urban sprawl by forcing more Canadians to
look further to the exurbs to realize their dream of a owning a
detached, single-family home with a yard,” Konrad Yakabuski wrote
in his latest column.
“Extending the amortization period on insured mortgages, easing
the stress test introduced last year or increasing the $750 tax
credit for first-time buyers might encourage more millennials to
purchase a condo, the only type of property within financial
reach,” he added.“But since most millennials ultimately aspire to
purchase of a single-family home, it’s worthwhile asking whether
Canada needs any more condos right now.”
‘micro living’ catch on in Toronto?
One should look no further than Greater Montreal to witness
evidence of the phenomenon.Updated numbers provided by the Quebec
statistics agency showed that nearly 24,000 residents – a
significant proportion of which were young households – moved from
Montreal to the suburbs and exurbs in 2018.This was
Of Canada’s largest sectors, it was e-commerce that accounted
for much of the demand for Vancouver’s commercial and industrial
space, according to CBRE Ltd.
Specifically, the market’s warehouse spaces attracted a majority
of the e-commerce firms and ventures taking roost in the city.
Industrial rent rates have consequently grown by 16% annually to
reach a record-high $11.86 per square foot last year – the highest
among Canada’s urban commercial property markets in 2018.
In contrast, Vancouver’s 1.5% industrial vacancy near the end of
2018 was among the lowest in North America.
commercial investment to intensify this year
Tight supply and historically low unemployment rates will foster
sustained demand for much of 2019, according to Avison Young Canada
Inc.in its report released in January.
Nearly 4.9 million square feet of industrial space was under
development across Metro Vancouver as of the end of last year, the
CBRE warned that Vancouver is in danger of running out of
industrial land soon, if these trends hold.
“There is a critical shortage of industrial land in Vancouver,”
CBRE Canada vice chairman Paul Morassutti told
“It was our estimation that they could potentially, literally
run out of industrial land by the
With housing deceleration nationwide becoming especially
apparent in January, observers warned that the strict lending rules
introduced last year might have had a more drastic impact than
“The decline in last month above and beyond what was observed a
year ago is indicative of the fact that the markets are not merely
reacting to new regulations, but the markets have embraced a more
systematic response that is characterized by fewer transactions and
lower prices,” Ryerson University associate professor Murtaza
Haider and real estate industry veteran Stephen Moranis wrote in a
recent analysis for the Financial Post.
January sales activity shrank by 4% annually, following an
already noticeable 2.4% decline during the same month last
“The January 2019 statistics offer the first opportunity to
compare the annual change in housing market dynamics after the
stress test came into effect,” Haider and Moranis stated, adding
that “the housing market slowdown is deeper rooted than a direct
and immediate reaction to policy interventions.”
and Montreal luxury condos surge in value
More importantly, a possible domino effect stemming from the
largest banks’ mortgage operations should not be ignored.
“The weakness in housing markets also affects mortgage lending,
a business The Big Five banks continue to dominate in Canada.The
Amid a marked slowdown in nationwide activity recently, the
Greater Toronto Area has actually experienced a considerable
year-over-year increase in new home sales, according to the
Building Industry and Land Development Association.
Citing data from Altus Group, BILD announced earlier this week
that GTA new home sales volume increased by 14% annually in
January, reaching 1,362 transactions.
A deviation from this trend was the single-family segment, which
saw its sales settle at levels 53% lower than the 10-year average
for this asset class.New condo apartments comprised a notable
portion of last month’s activity, with sales being only 5% lower
than the 10-year average.
Despite the road bumps, BILD president and CEO David Wilkes
deemed the January numbers as a welcome change.
“It looks like the market is starting to return to typical
levels after a particularly difficult year,” Wilkes said.“With the
spring budget coming up, we are calling on the federal government
to take steps to make it easier for first-time home buyers to get
into the housing market.”
Read more:Higher-density housing to dominate West GTA
“The improvement in new home sales over last January is
consistent with our outlook for somewhat higher annual sales in the
GTA this year, following the drop in 2018.” Altus Group
B.C.’s Ministry of Finance has announced the launch of the Condo
and Strata Assignment Integrity Register, the latest thrust in its
efforts to crack down on the speculation that has inflamed the
province’s housing prices to unprecedented heights.
Finance Minister Carol James said that the platform, which is
the first of its kind in Canada, will ensure fairness and
transparency in the industry.
“For too long, speculators and tax evaders have been taking
advantage of loopholes in our real estate market, driving up prices
and shutting British Columbians out of the market,” James said, as
quoted by The Canadian Press.
One of the registry’s goals is a mandate upon condo developers
to collect and report the identity and citizenship of any buyer
assigning their purchase contract of a condo to another party
(frequently at a higher price point) before the project that the
unit is associated with reaches completion.
cooling policies still needed – B.C.Finance Minister
The reports will be filed by developers every quarter, with the
first (covering January 1 - March 31) due April 30.
“The B.C.government will use this information to ensure that
people who assign condos are paying the appropriate income tax,
capital gains and property transfer tax,” the news release
Good news for luxury condominium owners in Toronto and
According to a luxury housing market report from Royal LePage,
the condo markets in Canada’s two largest cities appreciated 10.2%
and 8.4%, respectively, through the 12 months preceding January
31.The average price in Toronto reached $2,268,571, and in Montreal
it rose to $1,295,401.
The market for luxury detached houses in Toronto witnessed
a 40% drop in sales activity and, consequently, average prices
rose a paltry 3.1% to reach $3,575,702.Montreal’s luxury housing
market appreciated 5.4% year-over-year, hitting $1,680,942.
The luxury market in Vancouver, however, has seen better
days.During the aforementioned period, luxury condominium sales in
Greater Vancouver decreased 32.2%, as did prices by 0.6%, for an
average of $2,680,064.Greater Vancouver’s luxury housing market
also dropped 1.7%, but the cost is still Canada’s highest at
$5,751,928.The report read:
“Across Canada’s five largest cities, Greater Vancouver was the
only city to post a decline in median luxury home prices.The number
of luxury houses trading hands declined over the past two years, a
trend that initially began with the introduction of measures to
cool the city’s real estate market in 2016.Luxury home values have
dipped but remain remarkably steady as many Vancouverites refuse to
sell at what they perceive as a discount.Exasperating soft demand,
Chinese nationals, an important luxury buyer