Vancouver council to vote on looking at increase to Empty Homes Tax

Under the EHT's current form, nearly 5,400 of the more than 7,900 homes deemed "vacant" were able to make use of exemptions to the tax.

Vancouver Mayor Kennedy Stewart is taking what could be the first steps toward his campaign promise of tripling the city's Empty Homes Tax (EHT).

In September, Stewart unveiled the promise to hike the tax rate to three per cent as one of the key planks in his housing platform.

Vancouver's EHT currently applies a one per cent tax on the assessed value of homes deemed to be vacant for more than six months per year, barring specific exceptions.


Stewart is now bringing a motion to council asking city staff to dig into the practicalities and possible repercussions of increasing the tax.

The motion calls on staff to develop a plan by March that would "review and improve the fairness and effectiveness of the Empty Homes Tax in achieving the objective of returning empty and underutilized properties to the market."

In doing so, it asks staff to "review the fairness and effectiveness of exemptions and definitions, considering as well the Provincial Speculation Tax definitions."

Under the EHT's current form, nearly 5,400 of the more than 7,900 homes deemed "vacant" were able to make use of exemptions to the tax.

Stewart's motion also asks staff to develop a proposed timeline for information on the impact of increasing the tax rate, along with possible program benefits and drawbacks.

Finally, it calls for recommendations on how to consult the public and conduct further internal analysis.

In November, the City of Vancouver said that in its first year, the EHT was expected to bring in about $38 million, $8 million above its initial estimate.

The tax is meant to encourage homeowners to rent out vacant properties, thus increasing the stock of available rental.

Last fall, the Canada Mortgage and Housing Corporation's (CMHC) 2018 rental market report for the city found the city's vacancy rate had declined from 0.9 per cent to 0.8 per cent year-over-year.

That same report found the average rent for a two-bedroom apartment had climbed in one year from $1,860 to $1,964.

Stewart's motion goes to council on Tuesday.

Provided by: Simon Little for MSN Money


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BC Home Sales Decline 25% in 2018

The British Columbia Real Estate Association (BCREA) reports that a total of 78,345 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in 2018, a decline of 24.5 per cent from the 103,758 units sold in 2017. The annual average MLS® residential price in BC was $712,508, an increase of 0.4 per cent from $709,601 recorded the previous year. Total sales dollar volume was $55.8 billion, a 24.2 per cent decline from 2017.

“BC home sales fell below the 10-year average of 84,800 units in 2018,” said Cameron Muir, BCREA Chief Economist. “The sharp decline in affordability caused by the B20 mortgage stress test is largely to blame for decline in consumer demand last year.”

A total of 3,497 MLS® residential unit sales were recorded across the province in December, down 39.1 per cent from December 2017. The average MLS® residential price in BC was $695,647, a decline of 5.2 per cent from December 2017. Total sales dollar volume was $2.4 billion, a 42.3 per cent decline during the same period. 

Total active residential listings were up 33.3 per cent to 27,615 units in December, the highest December inventory since 2014 when 33,995 active residential listings were recorded.

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Provided by: BCREA


Canadian House Prices To Drop As 'Huge' Wave Of New Homes Arrives: Report

The slowdown in Canada's housing market will get worse before it gets any better, a new analysis predicts, because the country is about to be flooded with a "huge amount" of new homes.

"Canada has been undergoing a construction boom," Capital Economics senior economist Stephen Brown wrote in the report issued last week. "As has been typical of historic real estate cycles around the world, new supply will reach the market just as demand is falling."

Indeed, home sales in Toronto in 2018 were 15 per cent below their historical norm in 2018, while in Vancouver they ran 40 per cent below the long-run average.

If the percentage of unsold new homes in Vancouver remains what it is, the number of unsold houses on the market will double in the metro area over the next two years as 40,000 new homes come on the market, Brown predicted.

a screenshot of a cell phone: Unsold units in Vancouver will pile up over the next two years, even if developers cut new construction to zero.© Provided by Oath Inc. Unsold units in Vancouver will pile up over the next two years, even if developers cut new construction to zero. 

The situation isn't quite so dire in Toronto — yet. Just one per cent of new homes in the area sits unsold, compared to 7 per cent in Vancouver. But Brown expects Toronto to follow in Vancouver's footsteps this year.

Developers will react by cutting back on new housing starts. But the lag between start and completion means the problem will happen regardless of what developers do now, Brown suggested. Even if Vancouver stopped building new homes entirely, the oversupply in the next two years would be nearly as large as if construction continued.

All of which could have a negative effect on the economy, starting with falling house prices.

"That, in turn, is likely to feed through to weaker consumer spending. Even more significantly, an end of the construction boom will weigh heavily on investment," Brown wrote.

But not everyone is convinced that the elevated levels of home construction mean there is an oversupply.

In a report last year, Bank of Montreal noted that Canada's population growth has accelerated in the past few years, thanks to higher immigration levels, and is now growing at the fastest pace in decades. That means we may be underestimating just what the "right" amount of new housing in Canada is, the bank's economists suggested.

"As has been typical of historic real estate cycles around the world, new supply will reach the market just as demand is falling."Stephen Brown, Capital Economics

That's also the view of many in the industry, who see a higher chance of housing shortages than oversupply in the coming years.

"With an increasing number of gainfully employed people looking to put a roof over their heads, and the scarce availability of rental accommodation, policy makers in our major markets will once again be struggling with housing shortages," said Phil Soper, president of realtor Royal LePage, in a market forecast in December.

"More than an affordable housing problem, we will once again be facing an overall housing supply crisis," Soper said.

"The future for Canadian housing remains bright, perhaps too bright."

Provided by:  HuffPost Canada on MSN Money


Canadian Housing Starts Trend Decreases in December

The trend in housing starts was 206,981 units in December 2018, compared to 212,338 units in November 2018, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

"The national trend in housing starts decreased in December, the fifth decline in the last six months," said Bob Dugan, CMHC's chief economist. "Reflecting these recent declines, total annual housing starts in 2018 were lower than in 2017, as lower single-detached starts more than offset a slight increase in multi-family starts this year.

Nonetheless, total housing starts remain elevated when compared to historical averages."

Monthly Highlights


Housing starts in the Vancouver Census Metropolitan Area (CMA) continued trending lower in December 2018, ending the year with an 11% decrease compared to 2017 despite that rental units rose by 40% in response to a tight rental market. City of Vancouver’s rental and condo sectors are the top two drivers to the annual housing starts. Surrey led the overall decline with housing starts down by 27% in 2018.


Total year-to-date housing starts initiated in Metro Victoria reached a level not seen since 1976 in December. Rental units were half of all housing starts in 2018 in response to heightened rental demand and low vacancy rates.


Edmonton housing starts trended lower in December as inventory levels remained elevated. On an annual basis, Edmonton starts were 12% below 2017 levels, which reflects lower demand driven by the current economic climate in Alberta. Starts for all types of units were lower, except for row units, which grew by 13%.


December total housing starts trended lower due to a decline in multi-family construction. In 2018, housing starts in the Regina CMA declined by 41% to 1,139 units from 1,923 in 2017. Single-detached starts declined by 47%, while multi-family starts were lower by 37%, compared to the previous year. A weak labour market, tighter credit market conditions, rising construction costs and elevated resale supply - all combined to reduce demand for newly constructed homes.


Kingston recorded the highest number of starts in any given month since September 2013. Rental apartments accounted for 77% of total starts in December. These new rental units will contribute needed supply to the market, as the apartment vacancy rate in Kingston has been trending lower since 2016. The total number of housing starts in 2018 was significantly above the 5-year average, with gains for all dwelling types.


In 2018, the Toronto CMA saw the most apartment starts ever recorded and overall housing starts were up 6% from a year ago. High prices, borrowing costs, and a widening price gap with resale market alternatives weighed down significantly on single-detached starts, which were the lowest in almost four decades. The deteriorating affordability for low-rise homes has fueled the demand for relatively affordable higher-density housing.


Annual housing starts in Hamilton CMA were the highest since 2004, despite the trend measure moving down in December. Apartment starts were primarily responsible for the high number of overall housing starts in 2018, having reached their highest level in over 40 years. In 2018, more buyers gravitated to less expensive homes and competition for vacant rental units intensified, both of which led to greater demand for new apartments. The appetite for new apartments was widespread across Hamilton CMA in 2018, occurring in each of three major markets, Burlington, Hamilton and Grimsby.


A high number of housing starts for December helped annual starts to surpass the 700 mark for just the second time in the past ten years. The price point of new low-rise homes in Brantford attracted more growing families and empty nesters from nearby Hamilton and West GTA markets compared to most years. Single-detached starts rebounded from a slow 2017, while row starts continued to trend up to their highest level since CMHC began tracking starts activity in Brantford over 40 years ago.


Housing starts in the Montréal area increased slightly in 2018 compared to 2017 (+1%). The decline recorded in the construction of condos (-6%) during this period was more than offset by rental apartment starts (+8%) which hit a 30-year record high. Just under half of all housing starts in the Montreal CMA in 2018 were intended for the rental market, including starts of rental retirement homes. However, most rental starts were intended for the larger non-retirement home sector. Relatively low vacancy rates, the aging population, and stronger demand from young households were likely all factors that stimulated residential construction in the rental market segment.

Province of Québec

The total number of housing starts in Quebec’s urban areas in 2018 was practically the same as in 2017. Residential construction in the past year continued to be supported by multi-unit housing starts, a large part of which were rental housing units. This was the case notably in Montréal and Québec. Overall, the growth in the supply of apartments in the province was stimulated by the aging of the population and by immigration.


Total housing starts in Halifax picked up pace in December due to a rise in apartment construction. By year-end 2018, multiples starts were up 6% compared to 2017 figures, driven by strong rental demand and migration. Apartment construction in 2018 was predominantly located in the suburban markets of Hammonds Plains and Mainland North, as well as on the Halifax Peninsula.

Prince Edward Island (PEI)

Total housing starts in PEI were 156% higher in December compared to a year ago. Singles were up by 9% and multiples by 347%, which contributed directly to the considerable monthly increase. This was driven by new multi-unit apartment and seniors’ condo projects, in reaction to a near zero vacancy rate on the Island. For 2018, total starts were up 26%, driven primarily by strong job growth and positive international immigration throughout the year.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 213,419 units in December, down from 224,349 units in November. The SAAR of urban starts decreased by 5.8% in December to 194,594 units. Multiple urban starts decreased by 6.8% to 144,728 units in December while single-detached urban starts decreased by 2.6% to 49,866 units.

Rural starts were estimated at a seasonally adjusted annual rate of 18,825 units.

 Provided by: CMHC


B.C. stats show foreign capital accounted for 2.92 percent of Metro Vancouver residential sales over 11 months
Last August, respondents to an Insights West poll in August identified four "primary causes" affecting the real-estate market.

They were, in order of responses, foreign homebuyers (84 percent), population growth (80 percent), shadow flipping (76 percent), and money laundering (73 percent).

But recently released B.C. government statistics suggest that foreign capital is not nearly as significant in the residential market as many might believe.


From January to November of 2018, foreign capital was involved in only 1,438 of the 49,210 transactions in Metro Vancouver.

That's only 2.92 percent of all transactions. The percentage rose to 4.07 percent in November when the market was exceptionally slow. (This information was initially disseminated over Twitter by former Statistics Canada employee Victor Wong.)

The chart below was taken from the DataBC website.

As reported by The Georgia Straight


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Metro Vancouver home sales decline below historical averages in 2018

Metro Vancouver* home sales in 2018 were the lowest annual total in the region since 2000.

The Real Estate Board of Greater Vancouver (REBGV) reports that sales of detached, attached and apartment properties reached 24,619 on the Multiple Listing Service® (MLS®) in 2018, a 31.6 per cent decrease from the 35,993 sales recorded in 2017, and a 38.4 per cent decrease compared to the 39,943 residential sales in 2016.

Last year’s sales total was 25 per cent below the region’s 10-year sales average.

“This past year has been a transition period for the Metro Vancouver housing market away from the sellers’ market conditions we experienced in previous years,” Phil Moore, REBGV president said. “High home prices, rising interest rates and new mortgage requirements and taxes all contributed to the market conditions we saw in 2018.”

Home listings in Metro Vancouver reached 53,614 in 2018. This is a 1.9 per cent decreasecompared to 54,655 homes listed in 2017 and a 6.9 per cent decrease compared to the 57,596 homes listed in 2016.

“The supply of homes for sale will be an important indicator to follow in 2019. We’ve had record building activity in recent years and many projects will complete soon. This will provide additional housing options for home buyers across the region,” Moore said.

The MLS® HPI composite benchmark price for all residential homes in Metro Vancouver ends the year at $1,032,400. This is a 2.7 per cent decrease compared to December 2017.

“As the total supply of homes for sale began to accumulate in the spring, we began to see downward pressure on prices across all home types throughout the latter half of the year,” Moore said.

The benchmark price of detached homes in the region declined 7.8 per cent over the last 12 months and 7.3 per cent since June 2018. Apartment homes increased 0.6 per cent over the last 12 months and have declined 6.4 per cent since June 2018. The benchmark price for townhomes in Metro Vancouver have increased 1.3 per cent since December 2017 and have decreased 5.3 per cent over the last six months.

December summary
REBGV reports that residential home sales in the region totalled 1,072 in December 2018, a 46.8 per cent decrease from the 2,016 sales recorded in December 2017, and a 33.3 per cent decrease from November 2018 when 1,608 homes sold.

Last month’s sales were 43.3 per cent below the 10-year December sales average.

There were 1,407 detached, attached and apartment homes newly listed for sale on the MLS® in Metro Vancouver in December 2018. This represents a 25.6 per cent decrease compared to the 1,891 homes listed in December 2017 and a 59.3 per cent decrease compared to November 2018 when 3,461 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,275, a 47.7 per cent increase compared to December 2017 (6,958) and a 16.5 per cent decrease compared to November 2018 (12,307).

For all property types, the sales-to-active listings ratio for December 2018 is 10.4 per cent. By property type, the ratio is 7.1 per cent for detached homes, 12 per cent for townhomes, and 14.2 per cent for apartments.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

Sales of detached homes in December 2018 reached 348, a 43.6 per cent decrease from the 617 detached sales recorded in December 2017. The benchmark price for a detached home is $1,479,000. This represents a 7.8 per cent decrease from December 2017 and a 1.4 per cent decrease compared to November 2018.

Sales of apartment homes reached 535 in December 2018, a 34 per cent decrease compared to the 1,028 sales in December 2017. The benchmark price of an apartment home is $664,100. This represents a 0.6 per cent increase from December 2017 and a 0.6 per cent decrease compared to November 2018.

Attached home sales in December 2018 totalled 189, a 49.1 per cent decrease compared to the 371 sales in December 2017. The benchmark price of an attached home is $809,700. This represents a 1.3 per cent increase from December 2017 and a 1.1 per cent decrease compared to November 2018.

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Provided by: REBGV

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