Set to rise
By the time this column appears, Real Estate Board of Greater Vancouver (REBGV) statistics will be available for February. Should historical patterns persist, sales figures should be stronger than in January. While weather patterns might mute the uptick traditionally seen in February, one would expect a better performance than in the traditionally slow month of January.
A great deal of attention was focused last fall on year-over-year declines in sales following changes to the property transfer tax that charged foreign buyers of residential properties in Metro Vancouver an extra 15%. REBGV commentary, meanwhile, welcomed the return to more normal sales volumes.
A glance at monthly sales figures for the years 2013 through 2016 indicates that 2016 wasn’t that much of an outlier once fall set in. While sales volumes in 2016 plummeted following August, the trend for the period from September to January was largely consistent. January sales were typically 30% to 35% below September volumes in each of the past four years, with the greatest drop posted in 2014.
The decline typically turned around in February, with sales strengthening through spring – something that could deliver good news for the BC Liberals as they face voters on May 9, shortly after the release of April sales figures.
REBGV residential sales typically decline in the latter half of the year, with the benchmark price for a residential property weakening during the final six months in five of the last 10 years.
In arrears
The question of residential foreclosures – or, more accurately, residential mortgages in arrears more than three months and thus subject to court proceedings by lenders – has slipped from the headlines over the past couple of years as attention focused on foreign buyers and affordability.
While no one was looking, the proportion of residential mortgages in arrears dropped – a positive sign for any observer of the market. The latest Canadian Bankers Association figures for the period through October 2016 indicate that B.C. mortgages in arrears have fallen from their most recent high of 0.47% in September 2013 to 0.22% in October 2016. Save for two months in which the declines reversed by a single basis point (most recently this past August), the decline has been steady. The current level is on par with arrears when Lehman Bros. collapsed in October 2008 (at which time levels were already increasing following the subprime mortgage crisis a year earlier).
Residential mortgages in arrears hit an all-time low in July 1990 (0.1%). The peak occurred in March 2000, when 0.68% of all mortgages were three months or more in arrears.
Trump tower opening
Whatever one thinks of the name, the completion and opening of Trump International Hotel & Tower Vancouver made good on nearly a quarter-century’s worth of development efforts.
Those on the scene in the late 1990s will recall the eight-storey concrete shell of a project that the Hong Kong backers hoped would be a club for business executives. Another proposal called for a 27-storey strata-titled office tower. Backing disappeared, construction stalled and permits lapsed. Cadillac Fairview acquired the site in 1999. When the city in 2003 demanded that something be done about what most everyone deemed an eyesore, Cadillac Fairview sold the site to Holborn Holdings Ltd.
The late Arthur Erickson was midwife to plans for a curvaceous tower to include 127 hotel rooms and 123 residences bearing the Ritz-Carlton name. The financial crisis of 2008 nixed the ambitions, however, and exactly eight years ago deposits on the residences – some of which sold for as much as $2,300 a square foot – were returned.
A revamped project returned to market in 2013 with 218 residences and just 147 hotel rooms, and bearing the Trump name. Construction proceeded apace, but not without controversy.
While the city favoured neither a derelict shell nor the Trump name on the site, one has to take some pleasure that any building at all has opened its doors.
