Maria Mak | 604-839-6368

 

February 4th, 2013

January home sales remain quiet

Home buyer demand remains below historical averages in the Greater Vancouver housing market. This has led some home sellers to remove their homes from the market in recent months.


The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 1,351 on the Multiple Listing Service® (MLS®) in January 2013. This represents a 14.3 per cent decrease compared to the 1,577 sales recorded in January 2012, and an 18.3 per cent increase compared to the 1,142 sales in December 2012.


Last month’s sales were the second lowest January total in the region since 2001 and 18.7 per cent below the 10-year sales average for the month.

 

“Home sale activity has been below historical averages in Greater Vancouver for about seven months. This has caused a gradual decline in home prices of about 6 per cent since reaching a peak last spring,” Klein said.


Since reaching a peak in May of $625,100, the MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver has declined 5.9 per cent to $588,100. This represents a 2.8 per cent decline compared to this time last year.


“It appears many home sellers are opting to remove their homes from the market rather than settle for a price they don’t want,” Eugen Klein, REBGV president said.


New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,128 in January. This represents a 10.9 per cent decline compared to the 5,756 new listings reported in January 2012. Last month’s new listing count was 18.9 per cent higher than the region’s 10-year new listing average for the month.


The total number of properties currently listed for sale on the Greater Vancouver MLS® is 13,246, a 5.6 per cent increase compared to January 2012 and a 4.5 per cent decline compared to December 2012. This is the fourth consecutive month that overall home listings have declined in the region.


“When a home seller isn’t receiving the kind of offers they want, there comes a point when they decide to either lower the price or remove the home from the market. Right now, it seems many home sellers are opting for the latter,” Klein said.

With the sales-to-active-listings ratio at 10.2 per cent, the region remains in buyers’ market territory. Since June, this ratio has ranged between 8 and 11 per cent.


Sales of detached properties in January 2013 reached 542, a decrease of 17.8 per cent from the 659 detached sales recorded in January 2012, and a 31.7 per cent decrease from the 793 units sold in January 2011. The benchmark price for detached properties decreased 3.1 per cent from January 2012 to $901,000. Since reaching a peak in May 2012, the benchmark price of a detached property has declined 6.9 per cent.


Sales of apartment properties reached 576 in January 2013, a decline of 12.3 per cent compared to the 657 sales in January 2012, and a decrease of 19.2 per cent compared to the 713 sales in January 2011. The benchmark price of an apartment property decreased 2.9 per cent from January 2012 to $358,400. Since reaching a peak in May 2012, the benchmark price of an apartment property has declined 5.6 per cent.


Attached property sales in January 2013 totalled 233, a decline of 10.7 per cent compared to the 261 sales in January 2012, and a 25.6 per cent decrease from the 313 attached properties sold in January 2011. The benchmark price of an attached unit decreased 1.7 per cent between January 2012 and 2013 to $449,900. Since reaching a peak in April 2012, the benchmark price of an attached property has declined 7.7 per cent.

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To keep pace with rising property assessments, the BC government has raised the Home Owner Grant threshold by $10,000 to $1,295,000. The threshold is the maximum assessed value an owner’s property can reach, which still allows them to claim the full Home Owner Grant.

How is the threshold established?

BC Assessment estimates the value of all BC homes on July 1 each year. The Ministry of Finance reviews this data and adjusts the Home Owner Grant threshold to ensure at least 95.5 per cent of eligible homeowners receive the full amount.

This move ensures more than one million home owners in BC may be eligible to receive the full grant. Owners of homes valued above the threshold may qualify for a partial grant.

The basic Home Owner Grant gives home owners:
• a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver and Fraser
Valley regional districts;
• an additional grant of $275 to seniors aged 65+, those who are permanently disabled and war veterans of certain wars, or low-income Canadian Forces veterans who don’t already qualify as seniors or persons with disabilities; and
• a Northern and Rural Area Homeowner Benefit which increases the Home Owner Grant by $200 to provide additional property tax relief for northern and rural British Columbians.

Basic grant: for 2013, the basic grant is reduced by $5 for each $1,000 of assessed value over $1,295,000, and is eliminated on homes assessed at $1,409,000 or more.

Additional grant: for 2013, the additional grant is reduced by $5 for each $1,000 of assessed value over $1,295,000, and is eliminated on homes assessed at $1,464,000 or more. 

Home Owner Grant thresholds 

Property
Tax Year
Assessment
Threshold
Amount
Basic Home
Owner Grant
Phase-out
Threshold
Additional Home
Owner Grant
Phase-out
Threshold
2012 $1,285,000 $1,399,000 $1,454,000
2013 $1,295,000 $1,409,000 $1,464,000

Canadian citizens and landed immigrants residing in their principle residence are eligible for the grant.

The BC Government also provides property tax deferral programs for qualifying property owners including those age 55+, persons with disabilities, and families with children.

Deferment programs are low-interest loan programs that allow qualifying residents to defer all or part of their property taxes
until they sell or transfer ownership of their home, or it becomes part of an estate.

Home owners planning to participate in a tax deferment program should seek appropriate financial advice. For information on BC property tax deferment programs, visit: www.sbr.gov.bc.ca/hog

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The Bank of Canada announced on January 23rd, 2013 that it is keeping its key policy interest rate at 1 per cent, where it has been held for more than two years. In providing guidance on where interest rates are heading, the Bank said interest rate hikes are “less imminent than previously anticipated.”

 

The Bank acknowledged that Canadian economic growth slowed more abruptly in the second half of 2012 than it had previously anticipated. It also recognized a marked deceleration in the growth of household debt, moderation in the housing sector, and softer than expected inflation.

 

The Bank now expects inflation to return to its 2 per cent target sometime in the second half of 2014. That represents a significant weakening in the Bank’s outlook for inflation; in October, the Bank expected inflation to return to target by the end of 2013. Consumer Price Inflation rose by 0.8 per cent in November 2012.

 

The Bank said it still expects the Canadian economy to gain strength this year, but it lowered its forecast for economic growth to just 2 per cent in 2013. By contrast, its growth forecast for 2014 was raised to 2.7 per cent versus its previous forecast reading of 2.4 per cent contained in its previous Monetary Policy Report (MPR) published in October 2012.

 

The bottom line is that economic growth is expected to remain modest but positive, consistent with low inflation and low interest rates. At the same time, growth in household debt burdens, which the Bank has repeatedly flagged as a major risk in this low interest rate environment, is showing positive signs of topping out as housing market activity continues to stabilize at a more sustainable levels. Combined with extremely well anchored expectations for inflation, that means the Bank is in no hurry to raise interest rates anytime soon, with the first such move in that direction unlikely to be for at least another year.

 

As of January 23rd, 2012, the advertised five-year lending rate stood at 5.24 per cent. It has been unchanged at this level since the beginning of June 2012.

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To keep pace with rising property assessments, the BC government has raised the Home Owner Grant threshold by $10,000 to $1,295,000. The threshold is the maximum assessed value an owner’s property can reach, which still allows them to claim the full Home Owner Grant.

How is the threshold established?

BC Assessment estimates the value of all BC homes on July 1 each year. The Ministry of Finance reviews this data and adjusts the Home Owner Grant threshold to ensure at least 95.5 per cent of eligible homeowners receive the full amount.

This move ensures more than one million home owners in BC may be eligible to receive the full grant. Owners of homes valued above the threshold may qualify for a partial grant.

The basic Home Owner Grant gives home owners:
• a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver and Fraser
Valley regional districts;
• an additional grant of $275 to seniors aged 65+, those who are permanently disabled and war veterans of certain wars, or low-income Canadian Forces veterans who don’t already qualify as seniors or persons with disabilities; and
• a Northern and Rural Area Homeowner Benefit which increases the Home Owner Grant by $200 to provide additional property tax relief for northern and rural British Columbians.

Basic grant: for 2013, the basic grant is reduced by $5 for each $1,000 of assessed value over $1,295,000, and is eliminated on homes assessed at $1,409,000 or more.

Additional grant: for 2013, the additional grant is reduced by $5 for each $1,000 of assessed value over $1,295,000, and is eliminated on homes assessed at $1,464,000 or more. 

Home Owner Grant thresholds 

Property
Tax Year
Assessment
Threshold
Amount
Basic Home
Owner Grant
Phase-out
Threshold
Additional Home
Owner Grant
Phase-out
Threshold
2012 $1,285,000 $1,399,000 $1,454,000
2013 $1,295,000 $1,409,000 $1,464,000

Canadian citizens and landed immigrants residing in their principle residence are eligible for the grant.

The BC Government also provides property tax deferral programs for qualifying property owners including those age 55+, persons with disabilities, and families with children.

Deferment programs are low-interest loan programs that allow qualifying residents to defer all or part of their property taxes
until they sell or transfer ownership of their home, or it becomes part of an estate.

Home owners planning to participate in a tax deferment program should seek appropriate financial advice. For information on BC property tax deferment programs, visit: www.sbr.gov.bc.ca/hog

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I have listed a new property at 206 4105 MAYWOOD ST in Burnaby.
Spacious and bright 1 bedroom plus den in Times square. Corner unit facing south. Good sized living room leading out to a large balcony overlooking Central Park. Newer appliances. Building has recent updates include elevator, plumbing. Great amenities include exercise room, sauna/whirlpool. Central location with steps away from Patterson Skytrain, Metrotown and Crystal Mall. Easy to show.
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