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COMMERCIAL LEADING INDICATOR DIPS IN THIRD QUARTER 2021

The BCREA Commercial Leading Indicator (CLI) fell from 155.4 to 150.9 in the third quarter of 2021,representing the first decline since the economy began recovering from the COVID-19-induced recession.Compared to the same time last year, the index was up by 9 per cent.


It is important to note that while the economy generally continues recovering strongly, we are still in a very abnormal and uncertain environment for commercial real estate. Therefore, the strong economic and employment growth we have seen in previous quarters may not translate directly to improved conditions in the commercial real estate market.


The CLI declined in the third quarter due to a drop in the economic activity component of the index, which was the result of lower manufacturing sales. That decline in manufacturing was primarily due to a reversal in lumber prices following their historic run-up in the first half of the year. The economic activity component of the CLI was also negatively impacted by an 8.3 per cent decrease in wholesale trade, while retail sales declined 1.5 per cent primarily due to a 5.5 per cent quarterly decline in motor vehicle sales as a result of the ongoing semiconductor chip supply shortage. These negative economic factors combined to drive the quarterly decline in the CLI.


Employment in key commercial real estate sectors such as finance, insurance, and real estate (FIRE) increased in the third quarter, rising by 2,000 across the province to a record high for the sector. As a result, for a fourth consecutive month the office employment component of the index hit an all-time high. However, the effect of this strong employment growth on the demand for office space remains unclear as many nominal “office workers” continue to work remotely. Manufacturing employment also remained essentially flat in the third quarter.


The CLI’s financial component made a positive contribution to the index for a fourth consecutive quarter, while REIT prices hit fresh records. Risk spreads between corporate and government debt remained very tight.



Provided by: BCREA

“Copyright British Columbia Real Estate Association. Reprinted with permission.”

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A senior official at the Bank of Canada says the number of highly indebted households appears to be back on the rise as pandemic aid from governments winds down.


In a speech to conference held by the Ontario Securities Commission, deputy governor Paul Beaudry says unprecedented federal aid and restrictions that limited where consumers could spend helped bolster the finances of Canadian households during the pandemic.


But now he says that vulnerabilities linked to elevated household debt appear to be on the rise again after a slight pause.


"A key concern here is that financially stretched households have little breathing room to absorb any disruption to their income," Beaudry said in the prepared text of his speech Tuesday. 


"A job loss could force many to drastically cut their spending to keep servicing their debt. A drop in housing prices could also reduce household consumption because many people use their home as collateral to secure a home equity line of credit or refinance their mortgage."


He noted that bank calculations suggest the share of highly indebted household should this year surpass the pre-pandemic peak recorded in 2019.


Beaudry pointed to a long period of historically low interest rates as a reason for why households took on more debt, adding the economy is also likely now more sensitive to any increase in borrowing costs.


The warning about household debt comes as the central bank prepares to raise its key policy rate as early as April from its rock-bottom level of 0.25 per cent, where it has been since the onset of the pandemic.


The Office of the Superintendent of Financial Institutions and federal government announced plans earlier this year to tighten the mortgage stress test to make sure buyers could handle payments if interest rates rose.


Those actions may have encouraged some buyers to wait until they have a larger down payment, and others to buy a less expensive house, Beaudry said in the text of his speech to an Ontario Securities Commission conference.


But any moderation in housing prices appear to be reversing, largely a result of too many buyers and not enough supply to keep up with demand, he said.


Beaudry said a bank analysis suggests many Canadians are buying homes as investment properties that are similarly fuelling price increases. 


If that's the case, expectations of future price increases could become self-fulfilling, at least for a while, leading to a higher chance of a market correction, he said.


The damage from that would spread far beyond investors, Beaudry says, noting that many household wealth and access to low-cost credit are tied to the value of their home.


"None of that is to say a calamity is on the horizon," he said in the text of his speech.


"Nevertheless, a drop in housing prices could significantly affect household spending, with repercussions for employment — even if it didn’t put the financial system at risk."


© Provided by The Canadian Press 

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2021 already a record year for Canadian home sales

Statistics released today by the Canadian Real Estate Association (CREA) show national home sales have already set a new annual record in 2021.


Highlights:

  • National home sales rose 8.6% on a month-over-month basis in October.
  • Actual (not seasonally adjusted) monthly activity was down 11.5% on a year-over-year basis.
  • The number of newly listed properties climbed by 3.2% from September to October.
  • The MLS® Home Price Index (MLS® HPI) rose 2.7% month-over-month and was up 23.4% year-over-year.
  • The actual (not seasonally adjusted) national average sale price posted an 18.2% year-over-year gain in October.

Home sales recorded over Canadian MLS® Systems were up 8.6% between September and October 2021, marking the largest month-over-month increase since July 2020.


Sales were up month over month in about three-quarters of all local markets, and in all major cities.


The actual (not seasonally adjusted) number of transactions in October 2021 was down 11.5% on a year-over-year basis from the record for that month set last year. That said, it was still the second-highest ever October sales figure by a sizeable margin.


On a year-to-date basis, some 581,275 residential properties traded hands via Canadian MLS® Systems from January to October 2021, surpassing the annual record of 552,423 sales for all of 2020.


“After a summer where it looked like housing markets might be calming down a bit, October’s numbers suggest we might be moving back towards what we saw this Spring, with regards to current market demand and supply conditions,” said Cliff Stevenson, Chair of CREA. “That said, one month of data is not a trend, so we’ll be watching how the balance of this memorable year plays out closely. And remember, in what is still a rapidly changing landscape, your local REALTOR® can provide much more granular and timely information and guidance about what is going on in the neighbourhoods where you live or where you might like to in the future,” continued Stevenson.


“2021 continues to surprise. Sales beat last year’s annual record by about Thanksgiving weekend so that was always a lock, but I don’t think too many observers would have guessed the monthly trend would be moving up again heading into 2022,” said Shaun Cathcart, CREA’s Senior Economist. “A month with more new listings is what allows for more sales because those listings are mostly all still getting gobbled up; however, with demand that strong, the supply of homes for sale at any given point in time continues to shrink. It is at its lowest point on record right now, which is why it’s not surprising prices are also re-accelerating. We need to build more housing.”


The number of newly listed homes rose by 3.2% in October compared to September, driven by gains in about 70% of local markets. With so many markets starved for supply, it’s not surprising to see sales go up in months when more properties go up for sale.


With sales up by more than new listings in October, the sales-to-new listings ratio tightened again to 79.5% compared to 75.5% in September and 73.5% in August. The long-term average for the national sales-to-new listings ratio is 54.8%.


Based on a comparison of sales-to-new listings ratio with long-term averages, more markets have been moving back into seller’s market territory this fall. As of October, about two-thirds of local markets were seller’s markets based on the sales-to-new listings ratio being more than one standard deviation above its long-term mean.


There were just 1.9 months of inventory on a national basis at the end of October 2021, down almost half a month from three months earlier and back in line with the all-time lows recorded in February and March of this year. The long-term average for this measure is more than 5 months.


In line with some of the tightest market conditions ever recorded, the Aggregate Composite MLS® Home Price Index (MLS® HPI) accelerated to 2.7% on a month-overmonth basis in October 2021. This trend

has been quite broad-based with most parts of the country participating.


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Provided by: CREA

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October 2021 Top 10
Congrats to all the realtors who made the October's Top 10! To my clients, friends and family, THANK YOU for trusting me to do what I do.
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Just Listed: 109 9229 University Cr., Burnaby, Burnaby North, SFU

Bright and Spacious

Updates Throughout

2 bed, 2 bath, 1124sqft

Priced at $624,800


Click here for more...


FINALLY! The search is over. Welcome to this bright, spacious and updated corner/end unit home with plenty of windows and natural light. Conveniently located w/street access in Serenity, a pet & rental friendly SFU, UniverCity townhome complex. This 2bed/2bath/1124sqft home features: an open layout, fresh paint, quality wood flooring, crown moldings, over height ceilings, no-cord privacy blinds, cozy F/P, cute patio, tree/mountain views & much more. Enjoy the large kitchen w/SS apps, newer 6 burner gas stove, newer DW, Corian counters, plenty of cupboard space & large pantry. The king-size master has large walk-in & 5pc ensuite w/soaker. The 2nd bed is well sized. Bonus: huge laundry rm w/tons of storage & built-in shelving, newer HW tank, 1 parking AND locker! Act Now! Call today.

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As long-time members of the SFU Burnaby Mountain community, we had heard of Hafez Panju before we decided to look for a larger home in our neighbourhood. What we have appreciated in working with him in the purchase of one condo and the sale of another is the integrity, expertise, and unceasing attention he offers his clients. The care Hafez takes in responding to the many details and questions that arise when buying and selling properties is exceptional. We have bought and sold several homes in different cities over the years, and Hafez Panju is without doubt the best realtor with whom we have worked with.


N. D & V. A. M

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Metro Vancouver home buyers compete for fewer home listings in  October

Home sale activity in Metro Vancouver* remained above historical averages in October while the overall supply of homes for sale dipped to levels not seen in three years.


The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,494 in October 2021, a 5.2 per cent decrease from the 3,687 sales recorded in October 2020, and an 11 per cent increase from the 3,149 homes sold in September 2021.


Last month’s sales were 22.4 per cent above the 10-year October sales average.


“Home sale activity continues to outpace what’s typical for this time of year and the pool of homes available for sale is in decline. This dynamic between supply and demand is causing home prices to continue to edge up across the region,” Keith Stewart, REBGV economist said.


There were 4,049 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2021. This represents a 27.3 per cent decrease compared to the 5,571 homes listed in October 2020 and a 21.7 per cent decrease compared to September 2021 when 5,171 homes were listed.


The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 8,034, a 35.3 per cent decrease compared to October 2020 (12,416) and a 13 per cent decrease compared to September 2021 (9,236).


“Rising fixed mortgage rates should eventually help ease demand, but for now sales remain strong and buyers with rate holds will remain motivated to find a property for the rest of the year,” Stewart said.


For all property types, the sales-to-active listings ratio for October 2021 is 43.5 per cent. By property type, the ratio is 33.6 per cent for detached homes, 64.4 per cent for townhomes, and 46.7 per cent for apartments.


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


The MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is $1,199,400. This represents a 14.7 per cent increase over October 2020 and a 1.1 per cent increase compared to September 2021.


Sales of detached homes in October 2021 reached 1,090, an 18.4 per cent decrease from the 1,335 detached sales recorded in October 2020. The benchmark price for a detached home is $1,850,500. This represents a 20.5 per cent increase from October 2020 and a 1.2 per cent increase compared to September 2021.


Sales of apartment homes reached 1,801 in October 2021, a 14.7 per cent increase compared to the 1,570 sales in October 2020. The benchmark price of an apartment home is $746,400. This represents a 9.5 per cent increase from October 2020 and a 1.1 per cent increase compared to September 2021.


Attached home sales in October 2021 totalled 603, a 22.9 per cent decrease compared to the 782 sales in October 2020. The benchmark price of an attached home is $975,000. This represents an 18.5 per cent increase from October 2020 and a 1.2 per cent increase compared to September 2021. 


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Provided by: REBGV

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Reciprocity Logo The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.