July 2009 Vancouver CMA CMHC Stats

Here is what CMHC has to say:

Housing starts continued to trend lower in July. Foundations were poured for 517 new homes, down 73 per cent from July 2008. The majority of new housing projects were in Surrey and Vancouver City, and these were mostly single detached homes.


During the first seven months of the year, a total of 3,859 homes were started in the Vancouver census metropolitan area (CMA) compared to some 12,082 units for the same period last year.


Single-detached home starts have been trending up since the beginning of the year, and accounted for almost half of the new developments in July. Multiple-family units normally accounted for the larger share of total housing starts inVancouver.


Multiple-unit projects, on the other hand, continued to retreat. Developers have been taking a wait and see approach towards the multi-unit market even though the number of units absorbed has begun to trend upward and narrow the gap vis-à-vis last year's figures. There are still numerous projects under construction and a sound inventory of unsold new homes available. Homebuilding will remain modest until more of the inventory of new and existing homes is sold off.

Here is the data:

There were 517 housing starts. 236 of those starts were single family homes. 96 of those were in Surrey. Single family homes are simple and quick to permit, construct, and sell if need be.

There are still 19,292 housing units under construction in the Vancouver CMA. 13,754 are condominiums. There are 4,912 units under construction in the City of Vancouver and 3,007 in the City of Surrey.

There were 925 completions during July. 367 were townhouses. There were 222 completions in the City of Surrey.

The number of completed but unabsorbed units has been rising and is at 2,350. 726 of those are in Surrey and 307 of those are single family homes.

No Charts for You!

The kids are napping and I've got only a few seconds to post before going out to enjoy the sun so no charts today.

CMHC released complete April housing data for Vancouver and Abbotsford last week.

Here are the highlights:

Year to Date Starts 2008 - 6691

Year to Date Starts 2009 - 2302

Year to Date Completions 2008 - 5540

Year to Date Completions 2009 - 5377

Under Construction April 2008 - 26253

Under Construction April 2009 - 22494

Completed but Unabsorbed 2008 - 1445

Completed but Unabsorbed 2009 - 2368

Surrey has a crapload of unabsorbed new housing (754 units) and many more units on the way (5344 units under construction).  

Fraser Valley Real Estate - March 2009

The Fraser Valley Real Estate Board released their March statistics package last week and here are some of the highlights:

There were 1006 residential real estate transactions in the Fraser Valley. Sales were up from February but down significantly from previous years.



Active Listings are quite high and will likely rise through the spring and summer.


Months of inventory is at an elevated level of 9.8 and will likely remain at or around this level for the next two months before rising for the remainder of the year.

The FVREB House Price Index, in an uptrend for the past 4 years, has now fallen significantly from peak levels last spring. Even with an uptick the last couple months we are at 2006 price levels. We will see if prices hold up or not this year.


Months of Inventory has a high correlation with price changes and at the current and expected future inventory levels through the remainder of the year we should see continued negative pressure on prices.

Credit Crisis: The Worst May be Behind Us (for now)

Several indicators, like the TED spread, have now reversed direction this week and are now getting better not worse after hitting ridiculously elevated levels last Friday.

See Calculated Risk for more on the Credit Crisis.

The local media has really glommed onto the idea that house prices have fallen and are falling more.  The facts, which were clear to many of us 2 years ago, become more obvious by the day to the average Vancouverite - house prices got too high and now they need to come back down.  Articles in the Georgia Straight, Vancouver Sun, Province, and Globe and Mail all pointing to further weakness in the local housing market.  It is improbable that there will be any material improvement in this situation for at least 18 months.

Several projects have now hit the skids with the overly ambitious Infinity Project in Surrey making the headlines this week.  More to come on further project cancellations.

I had a nice time off.  What are you seeing out there right now?

Fraser Valley Real Estate Prices Lower than Last Year

The Fraser Valley Real Estate Board released the August 2008 statistics package and here is what it contained.

Active Listings in the FVREB ended August at 11,770 homes for sale.



There were only 910 sales in the entire FVREB area during the month of August.


This meant that the Months of Inventory rose to 12.9 months which means that the sales to listings ratio in the FVREB was 7.73% during the month.

As the ball is now rolling on negative price changes, the correlation between the supply and demand metrics and the corresponding price changes is 'uncanny' to put it simply!

And yes, prices fell 0.1% from August 2007 according the the Real Estate Board's benchmark House Price Index.

FVREB - June 2008 Stats

Well, here is the last of the local real estate board reports to go over for June 2008 - the Fraser Valley Real Estate Board.

Sales were 1,418 - down 31% compared to June last year.
Active Listings were 11,295 - up 47% compared to June last year.
Months of Inventory stands at 8 months at the current sales pace.


Median prices were mixed in June with detached and apartment prices rising and attached prices falling.


The benchmark price fell -0.3% during June and year over year the benchmark price has risen only 3.6%. We are fast approaching negative year over year price changes.


The price changes last month fell within the expected range when looking at the months of inventory metric. Prices will continue to fall while the months of inventory remains high.

Cheers.

PS - Kudos to the FVREB staff for issuing the corrected data for the active listings after they changed they way the data is measured last month.

FVREB May 2008

The Fraser Valley Real Estate Board released their monthly statistic package to the public and here are the highlights.

Listings are up - - WAY UP. 33% higher than last year.

Sales are down - - WAY DOWN. 25% lower than last year.

Consequently the Months of Inventory is high for this time of year at 7 MOI.

Note regarding active listings - the FVREB decided to change the way they calculate active listings to a more accurate method but it limits our ability to compare year over year changes to inventory. Using the previous method, inventory would have been approximately 12,400 for an increase of 47% YOY and a MOI of 7.8.

Median Prices were up for detached (1.4%) and down for townhouses (-1.3%) and apartments (-2.2%). Low quality is the first to suffer during a real estate downturn like we are entering right now. The lower quality areas, structures, and housing types go down first and most.

We are well on our way to having negative Year over Year price changes with current annual appreciation for the House Price Index coming in at a lowly 4.5%. I fully expect that number to be negative by fall. The House Price Index in some lower quality areas is already in negative YOY% territory - see the press release for more details.

The price change model using months of inventory to predict future price movements is working well with a predicted MOM% price decline for the next few months on average.

. . . . and More Construction - Surrey

Surrey Major Projects according to the March 2008 BC Major Projects Inventory.

Urban Village Condominium Development
Status: Construction started Start: Oct 2007
Est. Cost ($ million): 1000 Finish: 2009

156th Street Underpass
Status: Construction started Start: Dec 2007
Est. Cost ($ million): 20 Finish: Spring 2009

Tate Rowhouse Condominiums
Status: Construction started Start: Spring 2008
Est. Cost ($ million): 20 Finish: Spring 2009

City Point Highrise Condominiums
Status: Construction started Start: Mar 2008
Est. Cost ($ million): 30 Finish: Late 2009

Quattro Residential Development
Status: Construction started Start: Fall 2007
Est. Cost ($ million): 600 Finish: Late 2009

Rosemary Heights Seniors Village
Status: Construction started Start: Nov 2006
Est. Cost ($ million): 20 Finish: Jun 2008

Laurel Place Seniors Residences
Status: Construction started Start: Sep 2006
Est. Cost ($ million): 40 Finish: Spring 2008

St Andrews at Northview Residential Development
Status: Construction started Start: Summer 2006
Est. Cost ($ million): 40 Finish: Summer 2008

Surrey Health Services Capacity Initiative
Status: Construction started Start: Fall 2007
Est. Cost ($ million): 214 Finish: 2011

St. Andrews at Northview Condominiums
Status: Construction started Start: Spring 2006
Est. Cost ($ million): 30 Finish: Fall 2008

The Veranda Townhomes
Status: Construction started Start: Spring 2006
Est. Cost ($ million): 30 Finish: Early 2008

d’Corize Residential Tower
Status: Construction started Start: Sept 2005
Est. Cost ($ million): 30 Finish: Spring 2008

Fraser Highway Widening
Status: Construction started Start: Jun 2005
Est. Cost ($ million): 45 Finish: Spring 2008

The Aura Residential Development
Status: Construction started Start: Aug 2005
Est. Cost ($ million): 20 Finish: Spring 2008

Central City Neighbourhood
Status: Construction started Start: Jun 2005
Est. Cost ($ million): 1000 Finish: 2009

Ixia Townhouse Development - 19219 - 67 Ave
Status: Construction started Start: Jan 2006
Est. Cost ($ million): 25 Finish: Early 2008

Payal Business Centre
Status: Construction started Start: Spring 2004
Est. Cost ($ million): 50 Finish: Late 2008

Compass Townhouse and Apartment Development
Status: Construction started Start: Nov 2006
Est. Cost ($ million): 43 Finish: Spring 2009

Grandview Corner Shopping District
Status: Construction started Start: Spring 2006
Est. Cost ($ million): 80 Finish: 2009

North Surrey Auto Mall
Status: Construction started Start: Jun 2005
Est. Cost ($ million): 75 Finish: 2009

Fraser River Port Expansion
Status: Construction started Start: Summer 2004
Est. Cost ($ million): 190 Finish: 2011

Border Infrastructure Project - Highway 10
Status: Construction started Start: Jun 2005
Est. Cost ($ million): 93 Finish: Oct 2008

Campbell Heights Business Park
Status: Construction started Start: Summer 2004
Est. Cost ($ million): 50 Finish: 2009

Elim Village Seniors Housing Development
Status: Construction started Start: Sep 2000
Est. Cost ($ million): 75 Finish: Early 2008

Guildford Park Place
Status: Construction started Start: Spring 2003
Est. Cost ($ million): 30 Finish: Spring 2008

Number of major projects in the City of Surrey: 25
Value of major projects in the City of Surrey: $3,850,000,000
The year most of the work is done: Late 2008 to early 2009

What happens when the projects finish, all the money is spent and the workers go home?

Home of Insanity

Whalley seems to be the home of insanity this spring. MLS # F2800307 is listed at a delusional $1 Million for the not-so-prestigious Whalley address. Here is the description:

Executive lifestyle living in this spectacular Penthouse, featuring panoramic views from every room. The professionally designed formal dining/living room will capture the most discerning buyer. The elegant gourmet kitchen, complete with granite counter tops, stainless steel appliances awaits a "Master Chef". Relax and entertain on the top of the world, on your own private, one of a kind, 1000 SF rooftop deck, complete with new hot tub, water feature, lighting and a spectacular panoramic views.

I am not sure what kind of views you are expecting but I don't call looking down onto King George Highway, the local Canadian Tire, and homeless people living under tarps in the local park a "panoramic view."

I have no idea what kind of 'executive' would want to live there but whatever company he/she is running - I'm running away!

Compare this Whalley condo listing with MLS # F2802965 a home listed in the Fraser Heights area of Surrey for $100,000 less. If I were in the market for a $1 Million home I would buy 4300 square foot home in Fraser Heights and buy a very comfortable vehicle for the extra $100,000.

Both homes are grotesque displays of overconsumption but value for dollar is certainly lacking in the Whalley condo. This type of price compression is typical near market tops where realtors persuade their clients to list at ever more ridiculous prices and detachment from market reality becomes pervasive. I mean really how many Whalley 'executives' are there. Is he/she going to commute on SkyTrain after walking past the drug addicts and the local McDonalds! I seriously doubt it. I'm really glad that the Whalley area is being cleaned up and that more people are going to live and work in the area but no 'executive' in their right mind would choose the condo over the home in Fraser Heights.

Observations From the Street

The weather was so nice this weekend, the wife and I decided to take baby mohican for a little drive. No better way to celebrate good weather in the suburbs than burning fossil fuels!

Some interesting observations from driving a little bit off the beaten path.

1) We aren't even close to running out of developable land.
2) There are innumerable new homes under construction in Langley / Surrey.
3) There are many "Development Proposal" signs all over the place for new subdivisions that contain 50 - 500 homes. (Bedford Landing, Milner Heights, Yorkson, Copper Creek, Clayton, and more - these are by developers like Parklane, Adera, Morningstar, Solterra, Foxridge, and lots of other smaller developers)
4) There were hundreds of for sale signs, mostly in new home developments. I assume most of these homes for sale are speculators or developers trying to sell their investment. Very few "sold" signs.

What are your observations from where you were out and about this weekend?

$200 Million Development for Guildford area of Surrey

Surrey Leader article by Kevin Diakiw.

"A $200-million residential tower development is in the works for North Surrey, complete with what is being described as affordable housing. United Properties Ltd. is planning five 18-storey towers at 15399 Guildford Dr., a few blocks southeast of 108 Avenue and 152 Street. One of the towers will be dedicated to 129 units of rental housing, while the suites in another of similar size will be sold at 10 per cent less than market prices. That’s made possible through a “spring mortgage” which will cover the reduced price. If the unit is sold before 10 years, the 10 per cent goes into a fund for the city.

Victor Setton, president of United Properties, is offering the “affordable housing” and spring mortgage in exchange for city approval to build a higher density than current zoning allows. He noted the buildings will be state of the art. “The project will be constructed using our innovative pre-cast system of hollow core planks with steel columns and beams,” Setton said. “Our environmental consultants have determined that there will be a 29,000 tonne reduction in the production of greenhouse polluting gases due to this method of construction.” Other environmentally friendly elements of the project include permeable surfaces on all driveways and parking areas and a centralized heating control. “This is going to be the most energy efficient building ever built in B.C.,” Setton told council. The project is expected to come to a land use meeting in the near future."

Apparently there is an 'affordability' problem in good ol' Surrey otherwise why would these people be barking off about making this development 'affordable.' Has anyone ever heard of the type of fundng formula they are talking about here? I wonder what kind of tenants / buyers this development may attract.

World Class Stupid?

UPDATED DATA

Well I was inspired by freako's comment in the previous thread about other city's housing prices so I wanted to compare our insane home prices with other insane home prices. Here we go:

How world class is Vancouver?



US house price data is from John Burns Consulting. Exchange rates are from the Bank of Canada. Local house price data is from the December 2006 RBC Affordability Index study.

More Apartment Supply for Surrey

More on Surrey Developments. Who is going to buy all of these condos?

Ooooh, ooooh, ooooh, I know, I know - - - - - IT'S THE SPECULATORS SILLY. Very few of these people are actually buying these units to actually live in them. Housing is not for living in, it's for investing dummy!

By Kevin Diakiw - Staff Reporter - Feb 23 2007

21- and 25-storey structures planned for 108 Avenue and West Whalley Ring Road. Two more huge residential towers are in the works for Whalley. Century Group Lands Corporation plans to build two structures – 21 and 25 storeys – at 108 avenue and West Whalley Ring Road. Total cost of the project is expected to be about $75 million. Located across the street from the Gateway SkyTrain station, the towers will contain a total of 452 suites. Graham McCollum, vice-president of development for Century Group Lands, said if all goes well, the buildings should be complete by 2009. The project proposal will go to public hearing Monday. It’s the second large project announced in the Whalley area in the past week. An 1,100-unit project was announced Monday, only a few blocks away on 108 Avenue. McCollum said the area is gaining market momentum. “This particular area is obviously an area in transition, so we want to be part of it,” McCollum said, adding access to SkyTrain was key in choosing the location. He predicts more development like it in coming years. “I bet 10 years from now, that area is going to look totally different than it is now,” McCollum said. The project is before Surrey city council Monday at 7 p.m.

More Developments:

Land rush in Whalley
By DHARM MAKWANA, 24 HOURS

Residents in North Whalley should get ready to welcome new neighbours. Quattro Phase One, a 140-new home development near Gateway Station, sold out in four hours, scooping up $36 million in the process. Homebuyers lined up hours in advance to lay claim to the Lower Mainland's least expensive housing project with units starting as low as $119,900. The 10-acre development has drawn so much attention that the second building will be fast tracked, giving priority to bidders who missed out on the first building. In total eight buildings will be constructed, offering units that increase in price at $10,000 increments.

City of Surrey Development Permits - SUPPLY, SUPPLY, SUPPLY

I was curious about how many development permits were issued and in process during 2006 in the City of Surrey so I did some data mining and discovered a few things:

1. There is a CRAP LOAD of development ongong and slated to begin here in the beginning of 2007 (over 11000 housing units in the City of Surrey).
2. 4000 units permitted in the last 12 months
3. 7300 units entered into the approval process in the last 12 months (not including approvals)
4. In North Surrey the story is Condos (over 3500, which does not include those currently under construction)
5. In South Surrey and Cloverdale the story is townhouses and yet more townhouses (3300 townhouses in development or slated for development in those two areas alone)
6. A surpisingly large number of senior's related developments (over 1500 units)

Note: Not all of those development permits applied for will be approved but I also did not go farther back than January 2006 to look for applications. Even assuming 1000+ units drop out of the process we are still looking at over 10000 units scheduled to be in construction or begin construction sometime in the next 12 months. I think the introduction of all of this supply will put some very serious price pressure on the market in the next 12 to 18 months.

‘Yaletown’ planned for Whalley

An article as seen in the Surrey Leader
By Kevin Diakiw
Staff Reporter
Feb 21 2007

A $600-million development planned for Whalley, described as “the missing piece of the puzzle” will transform the troubled area into an upscale neighbourhood, proponents believe.

For decades, the depressed site around 108 Avenue near King George Highway has been Surrey’s ground zero for drug dealing, prostitution and petty crime. A five-and-a-half acre parcel of vacant property at 108 Avenue and East Whalley Ring Road is overgrown and has often been a site of tent cities of homeless.

Development firm Tien Sher wants to build an 1,100-dwelling community using the vacant property and nearby land occupied by the Flamingo Hotel. CEO Charan Sethi said Monday the 10-acre development will convert the area into the next “Yaletown,” referring to the upscale neighbourhood in Vancouver. The first phases will be four, four-storey apartments with a total of 470 condominiums with ground floor commercial development. In addition, Sethi is planning four high rise apartment buildings just to the west. “We’re in the process of purchasing the Flamingo Hotel and the two properties south of that as well,” Sethi said. “We have firm contracts on all three properties.” Pete Nichols, of Whalley Printers, which is across the road from the proposed development, expects positive change in the area. “It’s going to be fantastic for this end, because it finally frames this area from 108 (Avenue) to 100 Avenue,” Nichols said. “It finally puts north of 104 on the map.” He pointed out other areas of Whalley have benefited from similar developments.

Four 28-storey residential towers at 100 Avenue and a 1,600-unit urban village planned for 102 Avenue and 133 A Street, along with the Central City tower, home to SFU, have begun to transform the south end of Whalley.

All of those projects, including this latest plan, have been partially fuelled by a 2003 reduction in development cost charges, which were dropped by 60 per cent. That incentive expires this June, but city council is considering an extension.

The Tien Sher development is the missing piece of the puzzle, according to Lesley Tannen, executive director for the Whalley Business Improvement Association. “When we’re trying to revitalize the commercial and business sector, what is the one thing that all of those businesses need?” Tannen asked. “They all need more feet through the doors.” She said once that happens, it will create an “ever-increasing and positive upward spiral.”

Mayor Dianne Watts agrees. “It’s a key area within the city centre,” said Watts. “It has typically been a depressed area ... the development will certainly improve that.” Sethi is expecting to break ground on the first phase in May, with completion about 18 months later. “That’s if everything goes well, I just hope our labour shortage doesn’t affect us too much,” Sethi said.

Since Monday’s announcement, Sethi said he’s been inundated with interested buyers.
“The phone is ringing off the hook right now,” he said. “We’re taking registration and sales people will begin making appointments for Saturday.” Studio apartments in the first phase start at $120,000, he said.

The tower portion of the project has to proceed through the city’s public hearing process. - For more information, visit the company’s website at http://www.quattroliving.ca/ or call 604-581-8000.

I think that some of these developments in Whalley will help improve the area quite a bit and I am actually looking forward to seeing more people move into the area. By my estimation there are more than 6000 residential housing units at some stage of development or permitting in the North Surrey area right now, which equates to nearly $2 billion of construction investment. I am just curious as to where all of these people are coming from and where they are getting the money to buy all of these condos.

Surrey is 2006 Home Construction Capital

I thought this article in the Surrey Leader was interesting as it highlights the fact that the suburbs are where a lot of the action is in this housing boom. I live and work in the Fraser Valley so I can attest to the frenetic pace of growth and the continual traffic nightmares. We have very little transit and a lot of new residents putting a lot of strain on the roads and other public facilities.

The average price of a detached home in Surrey.
12/2001: $251,224
12/2003: $301,078
12/2005: $389,682
12/2006: $469,029
12/2007: $???,??? (my guess - $431,000)
12/2008: $???,??? (my guess - $385,000)

By Jeff Nagel
Black Press
Jan 12 2007

Surrey became the new home construction capital of the Lower Mainland in 2006. Overall housing starts across the Greater Vancouver Regional District dropped two per cent last year, but Surrey recorded a 20 per cent increase to nearly 4,600 units, according to the Canada Mortgage and Housing Corporation.

That put it ahead of the construction pace in Vancouver, where the number of new starts fell 18 per cent to 3,426. Richmond moved into third place with 2,094 new units started, an 18 per cent gain paced by strong growth in multi-family units. Burnaby, where new construction was cut nearly in half to 1,606 mostly multi-family units, dropped to fourth.

Condo and other multi-family construction surged in places like Coquitlam, Maple Ridge and Pitt Meadows. “Densification is going to be an issue and people better get used to it,” said Greater Vancouver Home Builders Association CEO Peter Simpson. “We have to put more people in a more constrained space.” He predicts builders will increasingly offer developments that let residents live, work and play without travelling far. Coquitlam saw 976 multi-family units started last year, up from 260 in 2005, while Maple Ridge started 528 units, up from 111 the previous year.

Surrey continued to lead the GVRD in single-family house construction, with 2,247 starts accounting for nearly half the region’s total. Simpson expects past political opposition to growth from some city councils, notably in Delta, will moderate this year. “Mayor Lois Jackson has to start walking the talk,” he said, noting plans to build several hundred new units in Delsom Estates there may mark a turning point. The industry ended the year with construction starts down a sharp 26 per cent in December. But Simpson called that a blip due to extreme weather late in the year. “We had horrendous weather conditions,” he said. “We went through winds and floods and rain and snow. I think the only thing missing were locusts.” He predicted more balanced market in 2007 will give builders a chance to catch up on some work.

The number of workers employed in the Lower Mainland’s construction industry hit a new all-time high of 108,500 in December. Construction employment climbed 21.8 per cent in the Abbotsford area and 6.9 per cent in Greater Vancouver, according to the Vancouver Regional Construction Association. The sector marked its third straight annual increase in 2006.