The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
Visit our website to learn more about the data services we offer www.landcor.com
-1-
Back in 1984 the British Columbia real estate market shed more than
half its sales value and volume. Many of today’s new homebuyers cannot
imagine or have not financially and mentally prepared for a similar
deep ‘correction’.
In real estate, what goes up, can come down. Astute long-term buys
will trend up over the years despite the dips that smooth over time. Equity
increases if the homeowner is not overextended and has the sense
not to get intoxicated with the rises and the guts to ride the troughs.
Right now, with volatile residential markets, the numbers are not reassuring.
For example, a recent Scotia Economics overview of the
global real estate markets had Canada as the global leader going into
first-quarter 2010, with home prices lifting high on all fronts. But two
quarters in, Scotia Economics says the triple punch of financial market
volatility, so-so job creation and slowing global growth has created a
“dramatic” slowdown in Canada.
Canadian national home prices were up a healthy 6.8 percent yearover-
year in Q2 2010, but well below the 16.6-percent year-over-year
lift achieved in Q1 2010. When set against the implosions in the United
States, the United Kingdom and Spain, where mangled markets will
take years to recover, the Scotia report believes “higher growth” nations
such as Canada and Australia won’t implode, but instead “should
prove to be much more subdued than in recent years.”
Canadian consumer debt load doesn’t help. According to the Certified
General Accountants Association of Canada, Canadians now owe a record
$1.4 trillion in personal debt, or about $41,740 (and counting) for
every person, old and young, in Canada. This is about 2.5 times the
debt load of 1989, and tops the G8 per-capita debtor lists. The recent
CGAAC study notes that, spurred on by low interest rates, much of this
debt and borrowing has happened in the last two years, during one of
the most onerous recessions in five decades.
Much of the $1.4 trillion is mortgage debt, although the CGAAC also
notes that while Canadians in most parts of the country are now incurring
less mortgage debt to buy homes, we’re borrowing and spending
more on just about everything else.
In the Lower Mainland, on southern and eastern Vancouver Island and
in Interior meccas such as Kelowna, this trend of resilient pricing has
some foundation. In the last few years, there have been periods where
inventories rose and sales volumes dropped. However, actual home
prices dipped slightly, stubbornly refused to drop significantly, and
quickly rebounded.
In what were particularly incandescent Canadian real estate markets
(e.g. Vancouver and the Lower Mainland), the changes could mean a
financial crunch for over-extended homeowners. So warns the Affordability
Index: if the debt load for a home is more than four times household
income, it is in a risk area. In areas such as the City of Vancouver
where the AI approaches 10, the overall risk is serious. (Refer to www.
landcor.com for further information on the AI)
Everyone benefits when markets are prudent and stable. Construction
folk build and prosper, homeowners enjoy decent capital gains, affordability
(or some simulation of it) remains attainable, the generations
exchange abodes and life goes on.
In overly warm markets long primed for a true correction, sales stall,
inventories grow, price cuts clear off the books, sadder but wiser
pre-sale buyers who paid top dollar are noisily unhappy, ‘flippers’ get
caught out, the bargain hunters swoop in, long-term owners hunker
down, the markets adjust, affordability returns and, again, life goes on.
Here in BC, the volumes and counts are both up significantly quarter
over quarter and year over year, but given the long-term seasonal
adjustments for Q2 vs. Q1 and the overall economic status of 2010
versus 2009, they do not indicate a ‘boom’ but instead a reasonable
return to normal levels. Over time we will see a return to the vigorous
market that BC has enjoyed over the past few decades, but there’s still
room for caution given the global economic factors that are in play.
Rudy Nielsen, president and founder of Landcor Data Corporation,
adds: “I like the signs of recovery that I see, but I’ve been in the bush
many times and I know when I’m out of the woods. We’re not there yet.
Keep one eye on the trail and one on the bears.”
British Columbia Q2 2010
Residential Sales Summary
The Landcor Report August 18th, 2010
1 % change Q110 - Q210 2 % change Q209 - Q210
BC Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 35,253 23,195 52.0% 27,579 27.8%
Total Value of Sales $16.61B $10.69B 55.5% $11.34B 46.5%
Detached
Average $494,175 $487,357 1.4% $441,492 11.9%
Median $490,438 $488,000 0.5% $440,783 11.3%
Condo
Average $326,460 $333,144 -2.0% $303,048 7.7%
Median $320,000 $325,000 -1.5% $298,000 7.4%
Average $376,481 $365,232 3.1% $351,734 7.0%
Median $368,000 $360,000 2.2% $347,000 6.1%
Quarterly Sales Counts/ BC All
Quarterly Median Sales Prices/ BC All
BC - Riding It Out
The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
Visit our website to learn more about market trends in BC www.landcor.com
-2-
Metro Vancouver - Slower and Slippery
First-quarter residential average and median prices rose smartly. Although
sales were down at 11,468 units, all product types showed
solid average price gains, with SFD and Attached at $721,255 and
$445,348 respectively.
Overall sales jumped by an impressive 46 percent over Q1. However,
compared to Q2/2009, the arc of realized prices has eased.
Second-quarter SFD and Attached average prices dropped from last
year’s double-digit gains but still show respectable 4.45 and 2.4-percent
gains over first-quarter 2010, commanding average prices of
$753,321 and $456,046 respectively and pushing the affordability envelope
ever tighter. However, new approaches in housing could help
mitigate the cost crush.
Compared to second-quarter 2009, area condos gained value but
when put against first-quarter 2010, they slid slightly.
The national Real Estate Investment Network (REIN) recently made one
of its periodic searches for the ten ‘best’ Canadian cities to place a bet.
Surrey took the REIN number-four spot; strategically located and accessible,
Surrey could overtake Vancouver as ‘the’ West Coast location.
The rental market is strong and the prices are good.
Vancouver Island - a Glimpse of July
For Vancouver Island as a whole, the market motors on strongly with
Q2 showing special vigor; volume is up almost 60 percent to 6,275
units sold, total value is up almost 70 percent to $2.5 billion. Although
SFD didn’t match Metro Vancouver for double-digit gains, unlike Metro
Van, all product categories stayed in positive territory.
According to VIREB July figures, the CRD is down considerably in sales
and average prices. In July 2009, sales hit a 20-year-peak with 933
homes changing hands. In the 2010 comparable, sales were off 43.5
percent at 527 sales. Not surprisingly, year-over-year monthly totalsales
volume fell by 40 percent to $257.05 million versus $434.46
million in July 2009.
Compared to June, July saw average-price drops in all product categories;
SFD was off 5.2 percent, or from $649, 280 to $615,004. Condos
eased about 2.4 percent, or from $331,131 to $322,905. Townhouses?
Off a bit over two percent, or $429,549 to $420,578. Inventory is down
too, from 4,730 to 4,777 units, but even so, July inventory is up 23
percent over the July 2009 comparable.
North of Victoria and along the eastern coast of Vancouver Island, the
cool off saw June versus July SFD sales falling by 35 percent or from
415 to 347 units. Average price for SFD also eased slightly to $342,982
in July which demonstrates again the SFD market trend of decreased
sale counts and resilient pricing.
The Interior - Kootenay, Okanagan, BC North/Northwest Condos Fall
Out of the Tree, All Else Hangs Tight
In Q2 versus Q1 2010, condos in retiree-friendly Okanagan shed almost
a fifth of value, off 18.55 percent or from $310,815 to $253,166.
In the smaller BC North/Northwest region, the year-over-year drop in
average price was 42.51 percent, from $127,339 to $73,206. In the
Kootenay, the year-over-year condo plunge was almost 30 percent or
from $279,767 to $198,489.
Conversely, SFD and Attached in the Okanagan, Kootenay and BC North/
NW regions have held their ground. Values in both product categories
Gr. Vancouver Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 16,740 11,468 46.0% 13,228 26.5%
Total Value of Sales $10.30B $6.83B 50.8% $6.77B 52.1%
Detached
Average $0.75M $0.72M 4.4% $0.65M 15.6%
Median $0.70M $0.67M 3.6% $0.60M 15.8%
Condo
Average $362,569 $372,925 -2.8% $333,924 8.6%
Median $351,428 $358,000 -1.8% $323,000 8.8%
Attached
Average $456,046 $445,348 2.4% $398,322 14.5%
Median $440,000 $428,000 2.8% $383,000 14.9%
1 % change Q110 - Q210 2 % change Q209 - Q210 3 % change month to previous month
Gr. Van. Monthly Apr. May % Chg3 June % Chg3
Number of Sales 4,545 5,182 14.0% 7,013 54.3%
Total Value of Sales $2.76B $3.09B 11.7% $4.45B 61.2%
Detached
Average $0.74M $0.74M -0.8% $0.77M 3.9%
Median $0.68M $0.69M 1.5% $0.71M 5.0%
Condo
Average $366,308 $347,584 -5.1% $373,304 1.9%
Median $355,000 $334,000 -5.9% $365,000 2.8%
Attached
Average $441,439 $444,263 0.6% $473,662 7.3%
Median $418,000 $429,450 2.7% $468,000 12.0%
Vancouver Island Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 6,275 3,967 58.2% 4,972 26.2%
Total Value of Sales $2.49B $1.47B 69.7% $1.84B 35.6%
Detached
Average $424,636 $407,496 4.2% $386,986 9.7%
Median $425,000 $405,000 4.9% $392,000 8.4%
Condo
Average $292,210 $274,875 6.3% $291,938 0.1%
Median $290,000 $285,000 1.8% $287,000 1.0%
Attached
Average $337,839 $328,051 3.0% $308,272 9.6%
Median $349,900 $333,078 5.1% $315,000 11.1%
Van. Island Monthly Apr. May % Chg3 June % Chg3
Number of Sales 1,837 1,770 -3.6% 2,668 45.2%
Total Value of Sales $0.70B $0.73B 3.9% $1.07B 52.6%
Detached
Average $406,798 $428,829 5.4% $434,212 6.7%
Median $405,000 $425,000 4.9% $435,000 7.4%
Condo
Average $289,345 $290,248 0.3% $296,087 2.3%
Median $284,500 $291,000 2.3% $292,750 2.9%
Attached
Average $343,474 $346,863 1.0% $327,055 -4.8%
Median $373,000 $360,000 -3.5% $325,000 -12.9%
Okanagan Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 4,507 3,079 46.4% 3,620 24.5%
Total Value of Sales $1.53B $1.05B 46.0% $1.15B 33.8%
Detached
Average $393,905 $375,528 4.9% $367,578 7.2%
Median $390,000 $380,000 2.6% $370,000 5.4%
Condo
Average $253,166 $310,815 -18.5% $261,600 -3.2%
Median $249,900 $299,000 -16.4% $261,266 -4.4%
Attached
Average $307,154 $294,025 4.5% $304,829 0.8%
Median $303,000 $299,900 1.0% $290,107 4.4%
Okanagan Monthly Apr. May % Chg3 June % Chg3
Number of Sales 1,262 1,290 2.2% 1,955 54.9%
Total Value of Sales $410.31M $432.05M 5.3% $0.69B 68.3%
Detached
Average $380,309 $395,296 3.9% $402,068 5.7%
Median $374,500 $390,000 4.1% $398,000 6.3%
Condo
Average $251,281 $252,861 0.6% $254,740 1.4%
Median $245,000 $243,000 -0.8% $254,500 3.9%
Attached
Average $317,060 $300,785 -5.1% $304,727 -3.9%
Median $317,500 $299,900 -5.5% $300,000 -5.5%
The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
Visit our website to learn more about the data services we offer www.landcor.com
-3-
for all three regions posted good year-over-year and quarterly gains.
Condos have been savaged; the more traditional, homey residential
product has not. Whether or not this changes depends on the regional
economies and, good, bad or both, changes are coming.
Fraser Valley – Taking Up the REINs
As accessibility spreads into the Fraser Valley, homebuyers flourish,
especially where comparative affordability is the prime driver. Transportation
boosts such as improved Translink access and the Gateway
Project ease the commute to Metro Vancouver. Closer to home, initiatives
such the development-friendly Revitalization Tax Exemption (RTE)
in Abbotsford and what is a five-year stepped (100 to zero percent)
break on general municipal property taxes. The RTE helped birth the
$170-million, 594,000-square-foot High Street shopping centre and
boosted Abbotsford building permits by 200 percent year-over-year.
The REIN survey of the 10 most investment-worthy cities in Canada
saw Maple Ridge and Pitt Meadows tied for the number-five spot, just
behind Surrey. For years, dicey accessibility, distance and wending
roads kept a lid on property values, but accessibility popped it wide
open. The prediction is for another 400-plus businesses to target Pitt
Meadows and Maple Ridge, further increasing residential and investment/
commercial projects.
Fraser Valley commuters live for their ‘plots of hold’ at the end of the
asphalt rainbow. Mirroring the Metro Vancouver experience, values and
volumes for Attached and SFD product in the Valley dipped in firstquarter
2010 but stayed in positive territory, with the average SFD
sale at $456,484 and the average attached at $293,837. However,
compared to Q2/2009 figures, condos lost out, down 13.28 percent in
average value, or from $219,233 to $190,130. As density grows in the
Valley, Condos will pull up, but it might take awhile. If you buy, think
quality construction and longer-term.
Bugs and Ore Bodies: The MPB Takes, Metals Give Back
The Mountain Pine Beetle (MPB) has overwhelmed the Interior’s forestry
industries and severely affected the regional economies. Although
the ravages and range of the MPB diminish as its food supplies run
out, analysts at Central I Credit Union predict the cumulative damage
will affect the Interior regions for the next two decades,“resulting in a
loss of forestry-supported jobs. . . and possible population outflows.”
In direct jobs losses, Central I forecasts 11,250 person-years of employment
in silviculture, logging and forestry processing will be erased
through to 2028 with another 9,500 person-years in indirect and induced
employment also being eliminated. Even when housing starts in
the United States “invariably rise” to post-recession and “demographically
consistent” levels, Central I warns that the BC forestry industry
will face increasingly tough supply constraints as the last of the
MPB-affected wood moves through salvage and processing. In short,
Interior BC will run out of wood and, up to now, wood has driven those
economies.
In the shorter term, harvesting of MPB-killed wood has meant ‘uplifts’
to the Annual Allowed Cut (AAC) in specific areas; the more recent the
MPB infestation, the ‘fresher’ the dead and dying wood, and the busier
the lumber and pulp mills. Such uplifts bring short-term economic
gains to the areas.
Short-Term Winners
In 2010, Robson Valley hit its AAC peak. In 2011, it will be Dawson
Creek and Merritt. In 2012: Arrow, Bulkley and Fort St. John. By 2013
Cassier, Kootenay Lake, Boundary and Invermere. By 2014, the mills in
Cranbrook and Golden will hit their AAC peaks.
However, spurred by increasing demand from existing and emerging
markets in Asia, Central I also predicts the losses in the forestry industries
will be mitigated to a degree by an increased emphasis and
investment in energy, mining and transportation services. However
again, as these new jobs arise, expect population shifts within the
Interior as workers sell their homes and shift away from moribund
‘forestry’ towns in search of new employment – and housing, in those
areas closest to the digs.
For further reading related to this report, check our website in
the Market Information section.
Fraser Valley Monthly Apr. May % Chg3 June % Chg3
Number of Sales 1,129 1,171 3.7% 1,794 58.9%
Total Value of Sales $410.75M $454.67M 10.7% $0.67B 64.1%
Detached
Average $448,487 $448,838 0.1% $466,855 4.1%
Median $438,750 $439,000 0.1% $470,500 7.2%
Condo
Average $185,743 $187,041 0.7% $197,543 6.4%
Median $190,000 $193,000 1.6% $208,000 9.5%
Attached
Average $298,335 $294,126 -1.4% $290,552 -2.6%
Median $299,000 $305,000 2.0% $295,000 -1.3%
BC North/NW Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 2,278 1,282 77.7% 1,681 35.5%
Total Value of Sales $409.52M $205.49M 99.3% $277.51M 47.6%
Detached
Average $213,342 $199,733 6.8% $199,185 7.1%
Median $227,000 $215,000 5.6% $212,000 7.1%
Condo
Average $73,206 $87,439 -16.3% $127,339 -42.5%
Median $87,700 $88,000 -0.3% $148,900 -41.1%
Attached
Average $177,373 $154,107 15.1% $141,629 25.2%
Median $181,500 $177,500 2.3% $156,250 16.2%
BC North/NW Monthly Apr. May % Chg3 June % Chg3
Number of Sales 610 681 11.6% 987 61.8%
Total Value of Sales $102.37M $121.85M 19.0% $185.30M 81.0%
Detached
Average $207,430 $212,480 2.4% $217,606 4.9%
Median $223,500 $225,000 0.7% $230,000 2.9%
Condo
Average $105,210 $92,216 -12.4% $53,342 -49.3%
Median $96,500 $103,500 7.3% $56,500 -41.5%
Attached
Average $167,258 $160,382 -4.1% $199,998 19.6%
Median $186,250 $169,000 -9.3% $220,903 18.6%
Fraser Valley Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 4,094 2,661 53.9% 3,225 26.9%
Total Value of Sales $1.54B $0.95B 61.3% $1.10B 40.2%
Detached
Average $456,484 $445,221 2.5% $408,964 11.6%
Median $450,000 $441,000 2.0% $407,000 10.6%
Condo
Average $190,130 $189,775 0.2% $219,233 -13.3%
Median $197,780 $195,000 1.4% $223,675 -11.6%
Attached
Average $293,837 $284,861 3.2% $268,631 9.4%
Median $299,000 $290,000 3.1% $269,900 10.8%
1 % change Q110 - Q210 2 % change Q209 - Q210 3 % change month to previous month
The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
Visit our website to learn more about market trends in BC www.landcor.com
-4-
On the Landcor Data big-picture scale, the overall BC market is leveling
off and is still quite healthy as affordability creeps back in.
Year-over-year, Q2/2010 sales value is up a brisk 46 percent to $16.6
billion. This, after experiencing a dip in Q1/2010 to $10.7 billion before
rebounding an impressive 55.5 percent. Perhaps with an eye on the
then-incoming HST and expectations of interest-rate hikes, the volume
of sales jumped in Q2/2010, up 52 percent to 35,253 total.
Compared to Q2/2009, the year-over-year prices in all product
categories were up with Detached hitting the double digits, up almost
12 percent. When compared to the first quarter of 2010, the average
and median prices changes were consist for Detached and Attached
but the Condo, ‘canary in the mineshaft’ product class average price
dipped into negative territory, off two percent to $326,460. Singlefamily
Detached (SFD) and Attached values remained on the positive
side, with the average price up 1.4 percent and 3.08 percent to
$494,175 and $376,481 respectively.
Inventories are up overall; what the regular media called a “small
surge” in building permits in June pushed BC to its second-highest
month in 2010 for proclaimed building. In June, BC builders signed on
for $612.2 million of new homes and $248 million in non-residential
for a total of $860.2 million, just under the $876.5 million posted in
February, 2010.
However, this lift in building permits is tempered by a widening
notion that activity will ‘level’, or what Keith Sashaw, president of the
Vancouver Regional Construction Association, expects will be “some
softness” in the local residential and government sectors, coupled with
a decline in housing sales.
Q3: Seasonal Cooling and More...
Cooling markets affect product types differently. For example, the
Condo product is especially sensitive to market shifts. Although condos
are well accepted (by necessity) in dense urban areas such as Metro
Vancouver, new homebuyers’ attraction becomes muted as density
softens and distance widens. When prices pull back and more SFD
or Attached product is available, the condos appeal shrinks to smaller
demographics, such as retirees and empty nesters. This pull back is
particularly sharp in more rural areas such as BC North/North West, the
Kootenays and even the sunny Okanagan where the lure of communal
living (with maintenance fees) has taken a drubbing.
The Mountain Pine Beetle kill is being offset by a solid resurgence in
the mining sector driven predominantly by Asian markets. Transience
in the location of workforce demand will create some subtle shifts in
the residential roadmap across BC.
Initial indicators from July and August show decreased activity, and
we expect the natural seasonal cooling from Q2 to Q3 to be definite
and evident. The predominant global and seasonal factors will be
exacerbated by the HST and the HST run-up. The effect on new home
sales will be of interest in the short term, and we’re already watching.
Our Q3 report will be a study of how the residential market reacts to
these factors. LDC
Overview: Wither Goes BC?
Sound real estate decisions are made using the best possible information. Since our incorporation in 1987, Landcor Data
Corporation has grown to be one of the most trusted providers of objective real estate data and analysis in British Columbia.
During the past two decades we’ve helped hundreds of clients achieve their goals by offering the most comprehensive real
estate data, analysis and insight available. From real estate valuation and analysis to land economics research and systems
development, our staff of highly qualified experts are here to help you find solutions to your real estate analysis and data needs.
Landcor maintains the largest, most comprehensive database of historical sales and current information on BC residential and
commercial real estate.
Landcor’s database includes:
• BC Assessment data on 1.86 million properties;
• sales transaction data for BC, including prices updated weekly; and
• geographic location data used in custom reports.
LANDCOR® Data Corporation
200 – 313 Sixth Street
New Westminster, BC
V3L 3A7
Rudy Nielsen R.I. (B.C.) FRI
President and Founder
Visit our website to learn more about the data services we offer www.landcor.com
-1-
Back in 1984 the British Columbia real estate market shed more than
half its sales value and volume. Many of today’s new homebuyers cannot
imagine or have not financially and mentally prepared for a similar
deep ‘correction’.
In real estate, what goes up, can come down. Astute long-term buys
will trend up over the years despite the dips that smooth over time. Equity
increases if the homeowner is not overextended and has the sense
not to get intoxicated with the rises and the guts to ride the troughs.
Right now, with volatile residential markets, the numbers are not reassuring.
For example, a recent Scotia Economics overview of the
global real estate markets had Canada as the global leader going into
first-quarter 2010, with home prices lifting high on all fronts. But two
quarters in, Scotia Economics says the triple punch of financial market
volatility, so-so job creation and slowing global growth has created a
“dramatic” slowdown in Canada.
Canadian national home prices were up a healthy 6.8 percent yearover-
year in Q2 2010, but well below the 16.6-percent year-over-year
lift achieved in Q1 2010. When set against the implosions in the United
States, the United Kingdom and Spain, where mangled markets will
take years to recover, the Scotia report believes “higher growth” nations
such as Canada and Australia won’t implode, but instead “should
prove to be much more subdued than in recent years.”
Canadian consumer debt load doesn’t help. According to the Certified
General Accountants Association of Canada, Canadians now owe a record
$1.4 trillion in personal debt, or about $41,740 (and counting) for
every person, old and young, in Canada. This is about 2.5 times the
debt load of 1989, and tops the G8 per-capita debtor lists. The recent
CGAAC study notes that, spurred on by low interest rates, much of this
debt and borrowing has happened in the last two years, during one of
the most onerous recessions in five decades.
Much of the $1.4 trillion is mortgage debt, although the CGAAC also
notes that while Canadians in most parts of the country are now incurring
less mortgage debt to buy homes, we’re borrowing and spending
more on just about everything else.
In the Lower Mainland, on southern and eastern Vancouver Island and
in Interior meccas such as Kelowna, this trend of resilient pricing has
some foundation. In the last few years, there have been periods where
inventories rose and sales volumes dropped. However, actual home
prices dipped slightly, stubbornly refused to drop significantly, and
quickly rebounded.
In what were particularly incandescent Canadian real estate markets
(e.g. Vancouver and the Lower Mainland), the changes could mean a
financial crunch for over-extended homeowners. So warns the Affordability
Index: if the debt load for a home is more than four times household
income, it is in a risk area. In areas such as the City of Vancouver
where the AI approaches 10, the overall risk is serious. (Refer to www.
landcor.com for further information on the AI)
Everyone benefits when markets are prudent and stable. Construction
folk build and prosper, homeowners enjoy decent capital gains, affordability
(or some simulation of it) remains attainable, the generations
exchange abodes and life goes on.
In overly warm markets long primed for a true correction, sales stall,
inventories grow, price cuts clear off the books, sadder but wiser
pre-sale buyers who paid top dollar are noisily unhappy, ‘flippers’ get
caught out, the bargain hunters swoop in, long-term owners hunker
down, the markets adjust, affordability returns and, again, life goes on.
Here in BC, the volumes and counts are both up significantly quarter
over quarter and year over year, but given the long-term seasonal
adjustments for Q2 vs. Q1 and the overall economic status of 2010
versus 2009, they do not indicate a ‘boom’ but instead a reasonable
return to normal levels. Over time we will see a return to the vigorous
market that BC has enjoyed over the past few decades, but there’s still
room for caution given the global economic factors that are in play.
Rudy Nielsen, president and founder of Landcor Data Corporation,
adds: “I like the signs of recovery that I see, but I’ve been in the bush
many times and I know when I’m out of the woods. We’re not there yet.
Keep one eye on the trail and one on the bears.”
British Columbia Q2 2010
Residential Sales Summary
The Landcor Report August 18th, 2010
1 % change Q110 - Q210 2 % change Q209 - Q210
BC Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 35,253 23,195 52.0% 27,579 27.8%
Total Value of Sales $16.61B $10.69B 55.5% $11.34B 46.5%
Detached
Average $494,175 $487,357 1.4% $441,492 11.9%
Median $490,438 $488,000 0.5% $440,783 11.3%
Condo
Average $326,460 $333,144 -2.0% $303,048 7.7%
Median $320,000 $325,000 -1.5% $298,000 7.4%
Average $376,481 $365,232 3.1% $351,734 7.0%
Median $368,000 $360,000 2.2% $347,000 6.1%
Quarterly Sales Counts/ BC All
Quarterly Median Sales Prices/ BC All
BC - Riding It Out
The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
Visit our website to learn more about market trends in BC www.landcor.com
-2-
Metro Vancouver - Slower and Slippery
First-quarter residential average and median prices rose smartly. Although
sales were down at 11,468 units, all product types showed
solid average price gains, with SFD and Attached at $721,255 and
$445,348 respectively.
Overall sales jumped by an impressive 46 percent over Q1. However,
compared to Q2/2009, the arc of realized prices has eased.
Second-quarter SFD and Attached average prices dropped from last
year’s double-digit gains but still show respectable 4.45 and 2.4-percent
gains over first-quarter 2010, commanding average prices of
$753,321 and $456,046 respectively and pushing the affordability envelope
ever tighter. However, new approaches in housing could help
mitigate the cost crush.
Compared to second-quarter 2009, area condos gained value but
when put against first-quarter 2010, they slid slightly.
The national Real Estate Investment Network (REIN) recently made one
of its periodic searches for the ten ‘best’ Canadian cities to place a bet.
Surrey took the REIN number-four spot; strategically located and accessible,
Surrey could overtake Vancouver as ‘the’ West Coast location.
The rental market is strong and the prices are good.
Vancouver Island - a Glimpse of July
For Vancouver Island as a whole, the market motors on strongly with
Q2 showing special vigor; volume is up almost 60 percent to 6,275
units sold, total value is up almost 70 percent to $2.5 billion. Although
SFD didn’t match Metro Vancouver for double-digit gains, unlike Metro
Van, all product categories stayed in positive territory.
According to VIREB July figures, the CRD is down considerably in sales
and average prices. In July 2009, sales hit a 20-year-peak with 933
homes changing hands. In the 2010 comparable, sales were off 43.5
percent at 527 sales. Not surprisingly, year-over-year monthly totalsales
volume fell by 40 percent to $257.05 million versus $434.46
million in July 2009.
Compared to June, July saw average-price drops in all product categories;
SFD was off 5.2 percent, or from $649, 280 to $615,004. Condos
eased about 2.4 percent, or from $331,131 to $322,905. Townhouses?
Off a bit over two percent, or $429,549 to $420,578. Inventory is down
too, from 4,730 to 4,777 units, but even so, July inventory is up 23
percent over the July 2009 comparable.
North of Victoria and along the eastern coast of Vancouver Island, the
cool off saw June versus July SFD sales falling by 35 percent or from
415 to 347 units. Average price for SFD also eased slightly to $342,982
in July which demonstrates again the SFD market trend of decreased
sale counts and resilient pricing.
The Interior - Kootenay, Okanagan, BC North/Northwest Condos Fall
Out of the Tree, All Else Hangs Tight
In Q2 versus Q1 2010, condos in retiree-friendly Okanagan shed almost
a fifth of value, off 18.55 percent or from $310,815 to $253,166.
In the smaller BC North/Northwest region, the year-over-year drop in
average price was 42.51 percent, from $127,339 to $73,206. In the
Kootenay, the year-over-year condo plunge was almost 30 percent or
from $279,767 to $198,489.
Conversely, SFD and Attached in the Okanagan, Kootenay and BC North/
NW regions have held their ground. Values in both product categories
Gr. Vancouver Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 16,740 11,468 46.0% 13,228 26.5%
Total Value of Sales $10.30B $6.83B 50.8% $6.77B 52.1%
Detached
Average $0.75M $0.72M 4.4% $0.65M 15.6%
Median $0.70M $0.67M 3.6% $0.60M 15.8%
Condo
Average $362,569 $372,925 -2.8% $333,924 8.6%
Median $351,428 $358,000 -1.8% $323,000 8.8%
Attached
Average $456,046 $445,348 2.4% $398,322 14.5%
Median $440,000 $428,000 2.8% $383,000 14.9%
1 % change Q110 - Q210 2 % change Q209 - Q210 3 % change month to previous month
Gr. Van. Monthly Apr. May % Chg3 June % Chg3
Number of Sales 4,545 5,182 14.0% 7,013 54.3%
Total Value of Sales $2.76B $3.09B 11.7% $4.45B 61.2%
Detached
Average $0.74M $0.74M -0.8% $0.77M 3.9%
Median $0.68M $0.69M 1.5% $0.71M 5.0%
Condo
Average $366,308 $347,584 -5.1% $373,304 1.9%
Median $355,000 $334,000 -5.9% $365,000 2.8%
Attached
Average $441,439 $444,263 0.6% $473,662 7.3%
Median $418,000 $429,450 2.7% $468,000 12.0%
Vancouver Island Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 6,275 3,967 58.2% 4,972 26.2%
Total Value of Sales $2.49B $1.47B 69.7% $1.84B 35.6%
Detached
Average $424,636 $407,496 4.2% $386,986 9.7%
Median $425,000 $405,000 4.9% $392,000 8.4%
Condo
Average $292,210 $274,875 6.3% $291,938 0.1%
Median $290,000 $285,000 1.8% $287,000 1.0%
Attached
Average $337,839 $328,051 3.0% $308,272 9.6%
Median $349,900 $333,078 5.1% $315,000 11.1%
Van. Island Monthly Apr. May % Chg3 June % Chg3
Number of Sales 1,837 1,770 -3.6% 2,668 45.2%
Total Value of Sales $0.70B $0.73B 3.9% $1.07B 52.6%
Detached
Average $406,798 $428,829 5.4% $434,212 6.7%
Median $405,000 $425,000 4.9% $435,000 7.4%
Condo
Average $289,345 $290,248 0.3% $296,087 2.3%
Median $284,500 $291,000 2.3% $292,750 2.9%
Attached
Average $343,474 $346,863 1.0% $327,055 -4.8%
Median $373,000 $360,000 -3.5% $325,000 -12.9%
Okanagan Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 4,507 3,079 46.4% 3,620 24.5%
Total Value of Sales $1.53B $1.05B 46.0% $1.15B 33.8%
Detached
Average $393,905 $375,528 4.9% $367,578 7.2%
Median $390,000 $380,000 2.6% $370,000 5.4%
Condo
Average $253,166 $310,815 -18.5% $261,600 -3.2%
Median $249,900 $299,000 -16.4% $261,266 -4.4%
Attached
Average $307,154 $294,025 4.5% $304,829 0.8%
Median $303,000 $299,900 1.0% $290,107 4.4%
Okanagan Monthly Apr. May % Chg3 June % Chg3
Number of Sales 1,262 1,290 2.2% 1,955 54.9%
Total Value of Sales $410.31M $432.05M 5.3% $0.69B 68.3%
Detached
Average $380,309 $395,296 3.9% $402,068 5.7%
Median $374,500 $390,000 4.1% $398,000 6.3%
Condo
Average $251,281 $252,861 0.6% $254,740 1.4%
Median $245,000 $243,000 -0.8% $254,500 3.9%
Attached
Average $317,060 $300,785 -5.1% $304,727 -3.9%
Median $317,500 $299,900 -5.5% $300,000 -5.5%
The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
Visit our website to learn more about the data services we offer www.landcor.com
-3-
for all three regions posted good year-over-year and quarterly gains.
Condos have been savaged; the more traditional, homey residential
product has not. Whether or not this changes depends on the regional
economies and, good, bad or both, changes are coming.
Fraser Valley – Taking Up the REINs
As accessibility spreads into the Fraser Valley, homebuyers flourish,
especially where comparative affordability is the prime driver. Transportation
boosts such as improved Translink access and the Gateway
Project ease the commute to Metro Vancouver. Closer to home, initiatives
such the development-friendly Revitalization Tax Exemption (RTE)
in Abbotsford and what is a five-year stepped (100 to zero percent)
break on general municipal property taxes. The RTE helped birth the
$170-million, 594,000-square-foot High Street shopping centre and
boosted Abbotsford building permits by 200 percent year-over-year.
The REIN survey of the 10 most investment-worthy cities in Canada
saw Maple Ridge and Pitt Meadows tied for the number-five spot, just
behind Surrey. For years, dicey accessibility, distance and wending
roads kept a lid on property values, but accessibility popped it wide
open. The prediction is for another 400-plus businesses to target Pitt
Meadows and Maple Ridge, further increasing residential and investment/
commercial projects.
Fraser Valley commuters live for their ‘plots of hold’ at the end of the
asphalt rainbow. Mirroring the Metro Vancouver experience, values and
volumes for Attached and SFD product in the Valley dipped in firstquarter
2010 but stayed in positive territory, with the average SFD
sale at $456,484 and the average attached at $293,837. However,
compared to Q2/2009 figures, condos lost out, down 13.28 percent in
average value, or from $219,233 to $190,130. As density grows in the
Valley, Condos will pull up, but it might take awhile. If you buy, think
quality construction and longer-term.
Bugs and Ore Bodies: The MPB Takes, Metals Give Back
The Mountain Pine Beetle (MPB) has overwhelmed the Interior’s forestry
industries and severely affected the regional economies. Although
the ravages and range of the MPB diminish as its food supplies run
out, analysts at Central I Credit Union predict the cumulative damage
will affect the Interior regions for the next two decades,“resulting in a
loss of forestry-supported jobs. . . and possible population outflows.”
In direct jobs losses, Central I forecasts 11,250 person-years of employment
in silviculture, logging and forestry processing will be erased
through to 2028 with another 9,500 person-years in indirect and induced
employment also being eliminated. Even when housing starts in
the United States “invariably rise” to post-recession and “demographically
consistent” levels, Central I warns that the BC forestry industry
will face increasingly tough supply constraints as the last of the
MPB-affected wood moves through salvage and processing. In short,
Interior BC will run out of wood and, up to now, wood has driven those
economies.
In the shorter term, harvesting of MPB-killed wood has meant ‘uplifts’
to the Annual Allowed Cut (AAC) in specific areas; the more recent the
MPB infestation, the ‘fresher’ the dead and dying wood, and the busier
the lumber and pulp mills. Such uplifts bring short-term economic
gains to the areas.
Short-Term Winners
In 2010, Robson Valley hit its AAC peak. In 2011, it will be Dawson
Creek and Merritt. In 2012: Arrow, Bulkley and Fort St. John. By 2013
Cassier, Kootenay Lake, Boundary and Invermere. By 2014, the mills in
Cranbrook and Golden will hit their AAC peaks.
However, spurred by increasing demand from existing and emerging
markets in Asia, Central I also predicts the losses in the forestry industries
will be mitigated to a degree by an increased emphasis and
investment in energy, mining and transportation services. However
again, as these new jobs arise, expect population shifts within the
Interior as workers sell their homes and shift away from moribund
‘forestry’ towns in search of new employment – and housing, in those
areas closest to the digs.
For further reading related to this report, check our website in
the Market Information section.
Fraser Valley Monthly Apr. May % Chg3 June % Chg3
Number of Sales 1,129 1,171 3.7% 1,794 58.9%
Total Value of Sales $410.75M $454.67M 10.7% $0.67B 64.1%
Detached
Average $448,487 $448,838 0.1% $466,855 4.1%
Median $438,750 $439,000 0.1% $470,500 7.2%
Condo
Average $185,743 $187,041 0.7% $197,543 6.4%
Median $190,000 $193,000 1.6% $208,000 9.5%
Attached
Average $298,335 $294,126 -1.4% $290,552 -2.6%
Median $299,000 $305,000 2.0% $295,000 -1.3%
BC North/NW Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 2,278 1,282 77.7% 1,681 35.5%
Total Value of Sales $409.52M $205.49M 99.3% $277.51M 47.6%
Detached
Average $213,342 $199,733 6.8% $199,185 7.1%
Median $227,000 $215,000 5.6% $212,000 7.1%
Condo
Average $73,206 $87,439 -16.3% $127,339 -42.5%
Median $87,700 $88,000 -0.3% $148,900 -41.1%
Attached
Average $177,373 $154,107 15.1% $141,629 25.2%
Median $181,500 $177,500 2.3% $156,250 16.2%
BC North/NW Monthly Apr. May % Chg3 June % Chg3
Number of Sales 610 681 11.6% 987 61.8%
Total Value of Sales $102.37M $121.85M 19.0% $185.30M 81.0%
Detached
Average $207,430 $212,480 2.4% $217,606 4.9%
Median $223,500 $225,000 0.7% $230,000 2.9%
Condo
Average $105,210 $92,216 -12.4% $53,342 -49.3%
Median $96,500 $103,500 7.3% $56,500 -41.5%
Attached
Average $167,258 $160,382 -4.1% $199,998 19.6%
Median $186,250 $169,000 -9.3% $220,903 18.6%
Fraser Valley Q2 2010 Q1 2010 % Chg1 Q2 2009 % Chg2
Number of Sales 4,094 2,661 53.9% 3,225 26.9%
Total Value of Sales $1.54B $0.95B 61.3% $1.10B 40.2%
Detached
Average $456,484 $445,221 2.5% $408,964 11.6%
Median $450,000 $441,000 2.0% $407,000 10.6%
Condo
Average $190,130 $189,775 0.2% $219,233 -13.3%
Median $197,780 $195,000 1.4% $223,675 -11.6%
Attached
Average $293,837 $284,861 3.2% $268,631 9.4%
Median $299,000 $290,000 3.1% $269,900 10.8%
1 % change Q110 - Q210 2 % change Q209 - Q210 3 % change month to previous month
The Landcor Report - Q2 2010 Sales Summary August 18th, 2010
Visit our website to learn more about market trends in BC www.landcor.com
-4-
On the Landcor Data big-picture scale, the overall BC market is leveling
off and is still quite healthy as affordability creeps back in.
Year-over-year, Q2/2010 sales value is up a brisk 46 percent to $16.6
billion. This, after experiencing a dip in Q1/2010 to $10.7 billion before
rebounding an impressive 55.5 percent. Perhaps with an eye on the
then-incoming HST and expectations of interest-rate hikes, the volume
of sales jumped in Q2/2010, up 52 percent to 35,253 total.
Compared to Q2/2009, the year-over-year prices in all product
categories were up with Detached hitting the double digits, up almost
12 percent. When compared to the first quarter of 2010, the average
and median prices changes were consist for Detached and Attached
but the Condo, ‘canary in the mineshaft’ product class average price
dipped into negative territory, off two percent to $326,460. Singlefamily
Detached (SFD) and Attached values remained on the positive
side, with the average price up 1.4 percent and 3.08 percent to
$494,175 and $376,481 respectively.
Inventories are up overall; what the regular media called a “small
surge” in building permits in June pushed BC to its second-highest
month in 2010 for proclaimed building. In June, BC builders signed on
for $612.2 million of new homes and $248 million in non-residential
for a total of $860.2 million, just under the $876.5 million posted in
February, 2010.
However, this lift in building permits is tempered by a widening
notion that activity will ‘level’, or what Keith Sashaw, president of the
Vancouver Regional Construction Association, expects will be “some
softness” in the local residential and government sectors, coupled with
a decline in housing sales.
Q3: Seasonal Cooling and More...
Cooling markets affect product types differently. For example, the
Condo product is especially sensitive to market shifts. Although condos
are well accepted (by necessity) in dense urban areas such as Metro
Vancouver, new homebuyers’ attraction becomes muted as density
softens and distance widens. When prices pull back and more SFD
or Attached product is available, the condos appeal shrinks to smaller
demographics, such as retirees and empty nesters. This pull back is
particularly sharp in more rural areas such as BC North/North West, the
Kootenays and even the sunny Okanagan where the lure of communal
living (with maintenance fees) has taken a drubbing.
The Mountain Pine Beetle kill is being offset by a solid resurgence in
the mining sector driven predominantly by Asian markets. Transience
in the location of workforce demand will create some subtle shifts in
the residential roadmap across BC.
Initial indicators from July and August show decreased activity, and
we expect the natural seasonal cooling from Q2 to Q3 to be definite
and evident. The predominant global and seasonal factors will be
exacerbated by the HST and the HST run-up. The effect on new home
sales will be of interest in the short term, and we’re already watching.
Our Q3 report will be a study of how the residential market reacts to
these factors. LDC
Overview: Wither Goes BC?
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