The Bank of Canada today maintained its target for the overnight rate at 1 ¾ per cent.The Bank Rate is correspondingly 2 per cent and the deposit rate is 1 ½ per cent.

Recent Canadian economic data are in line with the projections in the Bank’s April Monetary Policy Report (MPR), with accumulating evidence that the slowdown in late 2018 and early 2019 is being followed by a pickup starting in the second quarter. The oil sector is beginning to recover as production increases and prices remain above recent lows. Meanwhile, housing market indicators point to a more stable national market, albeit with continued weakness in some regions.

Continued strong job growth suggests that businesses see the weakness in the past two quarters as temporary. Recent data support a pickup in both consumer spending and exports in the second quarter, and it appears that overall growth in business investment has firmed. That said, inventories rose sharply in the first quarter, which may dampen production growth in coming months.

The global economy is also evolving largely as expected since April, although the recent escalation of trade conflicts is heightening uncertainty about economic prospects. In addition, trade restrictions introduced by China are having direct effects on Canadian exports. In contrast, the removal of steel and aluminum tariffs and increasing prospects for the ratification of CUSMA will have positive implications for Canadian exports and investment.

Inflation has evolved in line with the Bank’s April projection. The Bank expects CPI inflation to remain around the 2 per cent target in the coming months. Core inflation measures all remain close to 2 per cent.

Overall, recent data have reinforced Governing Council’s view that the slowdown in late 2018 and early 2019 was temporary, although global trade risks have increased. In this context, the degree of accommodation being provided by the current policy interest rate remains appropriate. In taking future policy decisions, Governing Council will remain data dependent and especially attentive to developments in household spending, oil markets and the global trade environment.

The next scheduled date for announcing the overnight rate target is July 10, 2019. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.

Provided by: Bank Of Canada


Burnaby city council has given TransLink the go-ahead to keep planning for a gondola to SFU Burnaby Mountain campus

Burnaby council advances SFU gondola despite concerns.

Councillors want Forest Grove residents consulted before TransLink approves route.

Burnaby city council has given TransLink the go-ahead to keep planning for a gondola to Simon Fraser University’s Burnaby Mountain campus. The city’s mayor and councillors voted unaminously Monday to support, in principle, TransLink’s plan to link the school with a SkyTrain station. 

TransLink carries 25,000 people to SFU’s Burnaby Mountain campus every day, making it the biggest transit destination in the city without a SkyTrain station, according to a city staff report. Demand is only expected to grow as enrollment increases and the UniverCity community grows. 

A gondola could also better serve the school in winter, the report says. 

“The combination of snow and steep grades can make provision of (bus) service to Burnaby Mountain difficult in the winter months,” the report states. “Service is interrupted or significantly delayed on about ten days annually, sometimes necessitating the closure of the campus so that students and staff can evacuate before that day's transit service is cancelled.”

A gondola could, theoretically, serve the mountain faster, more frequently and more reliably than buses, city staff wrote. 

TransLink’s 10-Year Vision from 2014 did not include plans to build the gondola but did support studying the idea further.

Despite all voting to advance the planning process, several council members expressed concerns about the impacts the project could have on Forest Grove residents. 

A route proposed by TransLink would take the gondola directly over some homes in a straight line from the Production Way-University station to the SFU bus loop. Several councillors said this could become a nuisance and privacy violation for residents.  

“If that's the preferred route that TransLink wants to push through, I won't stand for it and I know the residents of Forest Grove won't stand for it,” Coun. Joe Keithley said. “Those people there, they're already living with the (Trans Mountain) pipeline, so to add this on top of it would be a crushing blow.”

TransLink has also proposed a longer route that would leave Production Way-University before making a 90-degree turn midway and continue to the campus. The route would avoid passing directly over homes but would pass close to more houses than the first option, the city report says.

Burnaby has proposed a third option: run the gondola from the Lake City Way station, around the Trans Mountain tank farm and then to the SFU bus loop. This option “would appear to offer an alternative with lower impacts to residents, riparian areas and the Burnaby Mountain Conservation Area,” the report states.  

Burnaby’s proposed route would be 4.3 kilometres long – 59 per cent longer than the most direct proposed route – but Coun. Sav Dhaliwal said the added cost would be worth it.

“If we think the project is that good, that it's going to be a benefit for the next 60 years or a lot more, then we should be willing to spend a lot more money,” he said.

The veteran councillor, who also serves as Metro Vancouver’s board chair, said he’s not convinced the project’s estimated $200 million price tag will be worth the purported benefits. A gondola can never fully replace road access in snowy weather, he said. 

“The roads have to be still clear. If we're not doing it, we need to give some more attention to that so people can get there under any circumstances, under any weather conditions,” he said. “It hardly ever snows here; if it does, it's not exactly the blizzard that other parts of the country (get).”

TransLink is now expected to seek funding from senior levels of government to advance the gondola project plan. 

Provided by: Kelvin Gawley for the Burnaby Now


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 Downturn in Metro Vancouver market means billions in paper losses for homeowners: report

It's difficult to tell what part of the $89 billion in real estate market equity losses in Metro Vancouver are due to government policies rather than changing market forces.

The downturn in the Metro Vancouver real estate market has resulted in an estimated paper loss of $89.2 billion for property owners in the past year, according to a new analysis.

The study used assessed values reported in January to estimate the total value of residential properties after the decline in median home prices for all housing types in Metro Vancouver between April 2018 and April 2019.

From this, it estimated the average loss in total equity value and the estimated average equity loss per household in each area.

Vancouver, which has the highest number of dwellings at 283,915 dwellings, had a 13 per cent drop in total equity value, a loss of $43.6 billion or $153,873 per household.

West Vancouver has fewer homes at 16,930, but it had the highest percentage decrease in median value at 14.7 per cent. This is a drop of $7.6 billion in total equity value, or $451,485 per household.

• In Port Coquitlam, where there are 21,755 homes, there was a 10.2 per cent decrease, a drop of $1.5 billion in total equity value or $71,634 per household.

Paul Sullivan, senior partner at Burgess, Cawley Sullivan & Associates, a Vancouver-based commercial real estate and property tax appraisal firm, presents the findings today.

He mainly pins blame on B.C.’s demand-side taxes, including the speculation and vacancy tax, the additional school tax on luxury properties and increase in the foreign-buyers tax, arguing, in an opinion piece published by Postmedia, that “something has to give” as homeowners are faced with rising taxes and falling equity.

The period examined by Sullivan captures the implementing of federal mortgage stress testing rules in January 2018 and the announcing of the provincial housing taxes in February 2018. These ushered in a more significant slowdown in the number of home sales and then in prices.

At the same time, other markets such as Hong Kong, Singapore, Sydney, London and New York, which had double-digit percentage gains in recent years that were comparable to the Vancouver area, also started to soften in 2018 as overseas investment from China retreated because of stricter capital controls from Beijing and because financing became harder and more expensive to obtain.

In B.C., there has also been growing scrutiny of the nature of funds flowing into the once hot real estate market.

Sullivan said in an email it would difficult to calculate what part of the equity losses are caused by various government policies and how much by other changing market forces.

He wrote in the opinion piece that the losses are not necessarily only paper ones.

“Equity can be pulled out of your home to pay for things like unexpected emergency expenses, home renovations, post-secondary education and senior care costs.”

He added that this kind of equity loss can affect other parts of the economy as homeowners tighten their budgets.

The Bank of Canada recently said in its 2019 Financial System review that households in B.C. are more indebted, as measured by having a debt-to-income ratio greater than 350 per cent, and more of their net worth is concentrated in housing than in other provinces, with Ontario being at about 42 per cent of households and B.C. at about 52 per cent.

It went back to 2015 in describing how “when house prices grow at a faster pace than can be explained by economic fundamentals, a price correction that leads to financial stress becomes more likely. This can be serious when buyers are highly indebted,.”

The numbers in the report presented by Sullivan take into consideration the number of all dwellings in a municipality, including ones that are rental households.

Other distortions come from using an average of the percentage change in average sale prices for all housing types in a municipality. In Burnaby, for example, detached homes dropped in price by 13 per cent compared to attached homes dropping only one per cent and apartments by 4.42 per cent. The average percentage drop of all these housing types, 6.14 per cent, was used to estimate the equity loss of $5.25 billion for the municipality and $56,998 per household.

The NDP government has said its various taxes and measures are part of a wide plan intended to temper home prices and stabilize an overheated housing market that had become unaffordable for too many who make local incomes. It openly aims to charge speculators and those who pay income taxes in other jurisdictions a premium for buying homes.

Provided by: JOANNE LEE-YOUNG for the Vancouver Sun


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Canadian home sales rise in April 2019

Statistics released today by the Canadian Real Estate Association (CREA) show national home sales climbed in April 2019.


  • National home sales improved by 3.6% month-over-month (m-o-m) in April.
  • Actual (not seasonally adjusted) activity was up 4.2% year-over-year (y-o-y).
  • The number of newly listed homes climbed 2.7% m-o-m.
  • The MLS® Home Price Index (HPI) eased by 0.3% y-o-y in April.
  • The national average sale price edged up 0.3% y-o-y.

Home sales recorded via Canadian MLS® Systems rose by 3.6% m-o-m in April 2019. After having dropped in February to the lowest level since 2012, the rebound in sales over the past two months still leaves activity slightly below readings posted over most of the second half of 2018. (Chart A)

April sales were up in about 60% of all local markets, with the Greater Toronto Area (GTA) accounting for over half of the national gain.

Actual (not seasonally adjusted) sales activity was up 4.2% y-o-y in April (albeit from a seven-year low for the month in 2018), the first y-o-y gain since December 2017 and the largest in more than two years. The increase reflects gains in the GTA and Montreal that outweighed declines in the B.C. Lower Mainland.

“Housing market trends are improving in some places and not so much in others,” said Jason Stephen, CREA’s President. “All real estate is local. No matter where you are, a professional REALTOR® is your best source for information and guidance in negotiations to purchase or sell a home during these changing times,” said Stephen.

“Sales activity is stabilizing among Canada’s five most active urban housing markets,” said Gregory Klump, CREA’s Chief Economist. “That list no longer includes Greater Vancouver, which fell out of the top-five list for the first time since the recession and is well into buyers’ market territory. Sales there are still trending lower as buyers adjust to a cocktail of housing affordability challenges, reduced access to financing due to the mortgage stress-test and housing policy changes implemented by British Columbia’s provincial government,” said Klump.

The number of newly listed homes rose 2.7% in April, building on March’s 3.4% increase. New supply rose in about 60% of all local markets, led by the GTA and Ottawa.

With sales up by more than new listings in April, the national sales-to-new listings ratio tightened marginally to 54.8% from 54.3% in March. This measure of market balance has remained close to its long-term average of 53.5% since early 2018.

Considering the degree and duration to which market balance readings are above or below their long-term averages is the best way of gauging whether local housing market conditions favour buyers or sellers. Market balance measures that are within one standard deviation of their long-term average are generally consistent with balanced market conditions.

Based on a comparison of the sales-to-new listings ratio with the long-term average, about three-quarters of all local markets were in balanced market territory in April 2019.

The number of months of inventory is another important measure of the balance between sales and the supply of listings. It represents how long it would take to liquidate current inventories at the current rate of sales activity.

There were 5.3 months of inventory on a national basis at the end of April 2019, down from 5.6 and 5.5 months in February and March respectively and in line with the long-term average for this measure.

Housing market balance varies significantly by region. The number of months of inventory has swollen far beyond long-term averages in Prairie provinces and Newfoundland & Labrador, giving homebuyers there ample choice. By contrast, the measure remains well below long-term averages in Ontario and Maritime provinces, resulting in increased competition among buyers for listings and fertile ground for price gains.

The Aggregate Composite MLS® Home Price Index (MLS® HPI) appears to be stabilizing, having edged lower by 0.3% y-o-y in April 2019. (Chart B)

Among benchmark property categories tracked by the index, apartment units were again the only one to post a y-o-y price gain in April 2019 (0.5%), while two-storey single-family home and townhouse/row unit prices were little changed from April 2018 (-0.3% and -0.2%, respectively). By comparison, one-storey single-family home prices were down by -1.4% y-o-y.

Trends continue to vary widely among the 18 housing markets tracked by the MLS® HPI. Results remain mixed in British Columbia, with prices down on a y-o-y basis in Greater Vancouver (GVA; -8.5%) and the Fraser Valley (-4.6%), up slightly in the Okanagan Valley (1%) and Victoria (0.7%), while climbing 6.2% elsewhere on Vancouver Island.

Among Greater Golden Horseshoe housing markets tracked by the index, MLS® HPI benchmark home prices were up from year-ago levels in the Niagara Region (6.2%), Guelph (5.1%), Hamilton-Burlington (4.6%) the GTA (3.2%) and Oakville-Milton (2.5%). By contrast, home prices in Barrie and District held below year-ago levels (-5.3%).

Across the Prairies, supply remains historically elevated relative to sales and home prices remain below year-ago levels. Benchmark prices were down by 4.6% in Calgary, 4% in Edmonton, 4.3% in Regina and 1.7% in Saskatoon. The home pricing environment will likely remain weak in these cities until demand and supply return to better balance.

Home prices rose 7.8% y-o-y in Ottawa (led by an 11% increase intownhouse/row unit prices), 6.3% in Greater Montreal (led by a 7.8% increase in apartment unit prices), and 1.8% in Greater Moncton (led by an 11.5% increase in apartment unit prices). (Table 1)

The MLS® HPI provides the best way to gauge price trends, as averages are strongly distorted by changes in the mix of sales activity from one month to the next.

The actual (not seasonally adjusted) national average price for homes sold in April 2019 was close to $495,000, up 0.3% from the same month in 2018.

The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most expensive housing markets. Excluding these two markets from calculations cuts almost $104,000 from the national average price, trimming it to just over $391,000.

Provided by: CREA


Affordability Continues to Weigh on Housing Demand

The British Columbia Real Estate Association (BCREA) reports that a total of 6,652 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in April, a decline of 18.9 per cent from the same month last year. The average MLS® residential price in the province was $685,304, a decline of 6.2 per cent from April 2018. Total sales dollar volume was $4.6 billion, a 23.9 per cent decline from the same month last year.

“BC home sales were essentially unchanged from March on a seasonally adjusted basis,” said BCREA Chief Economist Cameron Muir. “Prospective home buyers continue to grapple with the decline in their purchasing power caused by federal government changes to mortgage policy.”

Total MLS® residential active listings increased 33.6 per cent to 38,672 units compared to the same month last year. The ratio of sales to active residential listings declined from 28.4 per cent to 17.2 per cent over the same period.

Year-to-date, BC residential sales dollar volume was down 29.8 per cent to $13.9 billion, compared with the same period in 2018. Residential unit sales decreased 24.5 per cent to 20,479 units, while the average MLS® residential price was down 7 per cent to $680,671.

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Provided by: BCREA


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$5 billion laundered through B.C. real estate in 2018

An independent report has found that $5 billion was laundered through British Columbia's real estate market last year and increased the cost of buying a home by five per cent.

The report by former B.C. deputy attorney general Maureen Maloney estimated that $7.4 billion overall was laundered in B.C. in 2018, a figure she says is conservative and added the total amount across Canada was about $47 billion.

Attorney General David Eby told a news conference on Thursday that money laundering is a ``malignant cancer'' on society and a ``national-level crisis.''

The provincial government commissioned two reports last September to shed light on money laundering by organized crime in the province's expensive real estate market.

Former deputy RCMP commissioner Peter German says in his report that the infusion of illicit money into the B.C. economy led to a frenzy of buying that raised the assessed values of homes throughout much of Metro Vancouver.

German's report says there are thousands of specific properties worth billions at high risk for potential money laundering.

An international anti-money laundering agency said last year that organized criminals were laundering about $1 billion annually in the province.

But Maloney's report details far more cash was filtered.

"As a conservative estimate, we're looking at money laundering on the scale of $7.4 billion in 2018. That's just for B.C., let alone the rest of Canada,'' she said.

Eby said wealthy criminals and those trying to evade taxes have run out of the province for too long, to the point they're distorting the economy, hurting families looking for housing and impacting those who have lost loved once because of the opioid overdose crisis.

"I am under no illusions that the problems we face are unique to B.C.,'' said Eby.

Federal Organized Crime Reduction Minister Bill Blair said earlier that he and Eby have met several times this year and are working together to fight money laundering.

The reviews aimed to shed light on money laundering by organized crime in real estate after last June's report on dirty money in casinos by German.

Following the gaming report, German was appointed to conduct a second review to focus on identifying the scale and scope of illicit activity in the real estate market.

Eby said earlier this week he was shocked to hear some criminals laundering money through B.C.'s luxury car sector are getting provincial sales tax rebates.

The attorney general said the government will move to plug tax loopholes to prevent the vehicle tax rebate that cost the province almost $85-million dollars since 2013.

B.C. also tabled legislation aimed at preventing tax evasion and money laundering by shining a spotlight on anonymous real estate owners hiding behind shell and numbered companies.

Several regulatory and professional agencies anticipated the findings of the reports and put anti-money-laundering policies in place last month.

The B.C. Real Estate Council said it would be partnering with the federal Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, to identify and deter money laundering and terrorist financing in the industry.

The B.C. Real Estate Association, the body that serves 23,000 realtors in B.C., said in April that it would join with four other agencies to keep the proceeds of crime out of real estate.

The other participating organizations include the Appraisal Institute of Canada, BC Notaries Association, Canada Mortgage Brokers Association and the Real Estate Board of Greater Vancouver.

Each organization has committed to sharing information, accepting only verified funds and making anti-money laundering education mandatory for its agents.

Provided by: The Canadian Press


REBGV statement on government reports on money laundering

The BC government released reports today on the findings of two examinations into potential money laundering activities in the real estate market.

Real Estate of Board of Greater Vancouver President Ashley Smith issued the following statement on the findings of these investigations.

Our position on the money laundering concerns raised in recent years has remained consistent. The real estate profession is here to do everything we can to assist law enforcement in combating money laundering, or any other criminal activity, in our communities. Where there’s evidence of an individual violating the law, or the rules and regulations governing our profession, that individual should be identified and held accountable.

Rising home prices in recent years have highlighted concerns about money laundering and other issues within the local real estate market. Since 2016, the Real Estate Board of Greater Vancouver has met with and given feedback and information to every government body established in our province to look into these matters.

Last month, we also partnered with the BC Real Estate Association, the Appraisal Institute of Canada – BC Association, BC Notaries Association, Canadian Mortgage Brokers Association – British Columbia to submit joint recommendations to the provincial and federal governments on how to strengthen anti-money laundering measures in real estate.

The submission made five recommendations to government and suggests best practices for practitioners operating across the real estate sector. These include requiring only verifiable funds be used across the real estate sector and mandatory anti-money laundering education be introduced for all real estate professionals.

Our organization, on behalf of the more than 14,000 REALTORS® we represent, is here to help. We welcome today’s reports and stand ready to provide any other assistance the appropriate authorities may ask of us.

Provided by: REBGV

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