Consistent increases in property listings and fewer home sales over the summer months has helped move the Greater Vancouver housing market into the upper end of a buyers’ market.

 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) reached 2,246 in September, a 1.2 per cent increase compared to the 2,220 sales in September 2010. Those sales also rank as the third lowest total for September over the last 10 years.

 

“There's more competition amongst home sellers in today's market, providing more options for prospective buyers," Rosario Setticasi, REBGV president said."Buyers now have more properties to choose from and more time to make decisions compared to the spring season.”

 

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,680 in September, the third highest volume for September in 17 years. This represents a 20.1 per cent increase compared to September 2010 when 4,731 properties were listed for sale on the MLS® and a 21.2 per cent increase compared to the 4,685 new listings reported in August 2011.

 

The number of properties listed for sale on the Greater Vancouver MLS® system has increased each month since the beginning of the year. At 16,085, the total number of residential property listings on the MLS® increased 4.6 per cent in September compared to August 2011 and rose 4.4 per cent compared to this time last year.

 

“Our sales-to-active-listing ratio currently sits at 14 per cent, which is the lowest it’s been this year. Generally analysts say that a buyer’s market takes shape when the ratio dips to about 12 to 14%, or lower, for a sustained period of time,” Setticasi said.

 

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 8.8 per cent to $627,994 in September 2011 from $577,174 in September 2010.

Since reaching a peak in June of $630,921, the benchmark price for all residential properties in the region has declined 0.5 per cent.

 

Sales of detached properties on the MLS® in September 2011 reached 957, an increase of 10.5 per cent from the 866 detached sales recorded in September 2010, and a 32.8 per cent decrease from the 1,423 units sold in September 2009. The benchmark price for detached properties increased 13.4 per cent from September 2010 to $896,701.

 

Sales of apartment properties reached 922 in September 2011, a 5 per cent decrease compared to the 971 sales in September 2010, and a decrease of 38.1 per cent compared to the 1,489 sales in September 2009. The benchmark price of an apartment property increased 4.4 per cent from September 2010 to $405,569.

 

Attached property sales in September 2011 totalled 367, a 4.2 per cent decrease compared to the 383 sales in September 2010, and a 43.3 per cent decrease from the 647 attached properties sold in September 2009. The benchmark price of an attached unit increased 5.4 per cent between September 2010 and 2011 to $516,697.

 

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Slumping economy will put interest rates on hold, or moving lower, until at least until 2013

 

A big Canadian bank predicts the slumping economy will put interest rates on hold, or moving lower, until at least until 2013. In an interest rate outlook released Tuesday, the Bank of Montreal said it does not expect interest rates to rise again until the early part of 2013. That's about six months later than earlier forecasts that rates would stay flat until the fall of 2012 as the Bank of Canada tries to boost the sagging economy.

 

In the bank's report, BMO Capital Markets senior economist Michael Gregory said the weaker global economy has squeezed commodities, the Canadian dollar and undermined growth in Canada. That has kept inflation in check and made it more likely the Bank of Canada will hold the line on rates.

In fact, Gregory said, there is a good chance the central bank will cut rates over the next six months — by close to half a point.

That's good news for homeowners with variable-rate mortgages and consumers financing loans and lines of credit tied to the prime rate. However, even rock-bottom rates may not be enough to spur consumers to spend if job loss fears grow and incomes sag.

In the United States, the Federal Reserve Board has already said it will keep rates low for another two years or so in the hopes of injecting consumer confidence back into the troubled economy.

"As global economic risks have escalated, casting commodity prices and the Canadian dollar much weaker, the Bank of Canada's diminishing tightening bias has probably diminished further," said Gregory.

"We now judge that the resumption of rate hikes will be an early-2013 affair."

The report noted that with recession risks building on both sides of the Canada-U.S. border, and the next six months being particularly critical, the odds of Bank of Canada cutting rates are also growing.

"The market is currently pricing in a little less than two (quarter point) rate cuts by April 2012," Gregory said.
"However, with core CPI inflation not far below its two per cent target, the loonie, now more than six cents weaker than where the bank had assumed in its projections, and a continued well-functioning domestic bank credit creation process, we judge the policy easing bar remains high. Short of signs of imminent recession, the bank should remain on hold."

The BMO report also projected the loonie will settle at around 93 cents U.S. next year.
"During the second half of 2012, with global economic and commodity price prospects improving, the currency's fortunes should shift with a flight plan back to parity by January 2013."