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Vancouver agents, builders greet signs of a rebound with glee

Kerry Gold, The Globe and Mail, January 24, 2014

Last year marked a return of confidence to Vancouver’s real estate market, with a 14-per-cent increase in sales over the year before, according to the Real Estate Board of Greater Vancouver.

Another year-end report, this one by Landcor, showed the single family detached price up 6.39 per cent in 2013, with the average Metro Vancouver house price at $869,772. And in its fourth quarter housing analysis of 2013, the B.C. Real Estate Association predicted another 6.3-per-cent increase in sales for 2014, with residential price to go up by another 2.1 per cent in 2014.

It’s not staggering change, but it’s change in the right direction for brokers who worried about the downturn in sales in 2012.

“Halfway through last year, confidence returned to the market,” says Royal LePage managing broker Bill Binnie, who owns several Lower Mainland franchise offices.

Royal LePage recently released its house price survey that said the average price for a detached bungalow increased 4 per cent year over year to $1,041,300, while the two-storey house increased to $1,139,050, or 3.3 per cent in Vancouver.

Condo prices rose 2.3 per cent, to $492,500. The firm’s market survey forecast predicts the momentum will carry into 2014, with price increases of 4.4 per cent in 2014.

“We saw the number of transactions increase,” says Mr. Binnie. “Even though prices were up only marginally, it was a very different market than the last of half of 2012 – far more active.”

Canada Mortgage and Housing Corp.’s tightening of mortgage insurance rules had an impact on Vancouver’s 2012 and early 2013 market, he says.

“We had both buyers and sellers sitting on the sidelines for almost a whole year, largely as a result of changes to the CMHC – or at least the timing was the same. So I think the results that the government wanted to achieve as far as slowing the market down certainly worked. In other words, there were a lot less sales and a lot less listings coming on. However, that changed last summer and we are back to a normal market now.”

Slower activity in the higher end of the market shows that buyers aren’t willing to throw money at just anything – as they seemed to be doing in the boom times of 2007 – but prices are also staying firm.

Sotheby’s International Realty agents Gregg and Mackenzie Close just set a record on Vancouver’s East Side Wall Street neighbourhood with the sale of a waterfront property at $1.7-million. The house had been on the market for more than two years when it was priced at $1.950-million. It was relisted at $1.795 million and sold shortly after.

In West Vancouver, a 10-year-old, five-bedroom house that had been on the market since February at $4.2-million, recently sold for $3.55-million.

On Point Grey Road, Regent Park Realty agent Bryan Yan just completed the sale of an Arthur Erickson designed house that had sat on the market for nearly a year.

It was the first time the house had come up for sale since it was built in 1967, and the 2,300-square-foot house – small by new build standards – is in its original condition. It sits on a 33-by-130-foot lot that extends into the water, which is an unusual feature, says Mr. Yan. The house was listed high, he says, at $5.29-million. It sold for $4.7-million.

“It was a really tough sell. It’s tiny. If it were done up, I would have sold it on day one,” says Mr. Yan. “It was bought by a local buyer. I deal in lots in Point Grey, and a lot of them were bought by Asians before, and now it’s more locals who are buying.”

Mr. Yan, who’s been a real estate agent in Vancouver for 20 years, says he knows the cycles. Buyers from mainland China will return after Chinese New Year on Jan. 31 to consider house purchases in Vancouver, and so he expects a bit of an increase in west side sales in February.

“Lower-priced entry-level detached homes everywhere in the Lower Mainland should go up in price this year by at least five to 10 per cent,” he predicts. “Condo prices should remain flat for a long time because the local governments are letting developers rezone and build everywhere.”

In central Coquitlam, homeowner Ria Lawson was surprised when her five-bedroom house sold two weeks after it was listed, in a bidding war that resulted in $10,000 above asking, for $735,000.

“Is the market hot? Not sure. I do know that if we listed too high we could have ended up getting no bites,” she says.

“I was worried about that, especially going into December. If it ended up being too high, we would have had to de-list and then try again in February.”

At the condo end of the market, which had softened the past couple of years, there’s industry hope of a sales increase there as well. Bosa Properties vice-president Daryl Simpson says that’s because of a shortage of new supply.

“The numbers we have show there are only 650 new concrete condo units in the inventory throughout Metro Vancouver,” he says. “Some people might think that’s a lot, but it’s actually a small number.

“Certainly, some markets have more supply than others. Richmond had a lot of inventory last year – that was a market that we thought was over-supplied. But there were about 900 units absorbed last year, so the logjam broke.

“So, for 2014 we feel good. We feel better than we did in 2013. I would say for the majority of large-scale concrete builders in this market, I think that we are feeling relatively strong. The idea of a bubble and soft landing and all that is behind us.”