More signs point to a real estate sales slowdown in the province

 

Breathing space

Several reports in the last week point to investors seeking breathing room, which means a break, if not a brake, for the market.

On the commercial side, Altus Group reported that 2018’s first quarter ranked among the top 10 in a historical sense, but with lower volumes than a year ago.

“Private, institutional and government purchasers were all active in the first quarter, an indication that confidence in the market remains strong, and from an array of stakeholders,” Paul Richter, director of data solutions for Altus, said in announcing the results.

Altus tracks sales worth $1 million and up. The quarter’s biggest sale was the $501 million deal Mesirow Financial Holdings Inc. struck for the Gateway Casinos & Entertainment Ltd. portfolio.

All told, 480 sales totalling $2.9 billion occurred in the quarter, down from 498 worth $3.4 billion in the same period a year ago.

On the residential side, the benchmark price for housing in the Real Estate Board of Greater Vancouver sales area rose just 0.2% in May 2017 versus the previous month, to $1,094,000. This was 13.1% higher than a year ago. The rate of change was the least since January 2017, when the benchmark price dropped 0.2%.

Nevertheless, while May sales dropped 35% from a year ago, sales volumes were up 9.8% from April. This was the fourth consecutive month of increasing residential sales. It was also the highest sales tally in the region since November 2017, when 2,795 properties sold.

Average prices for recreational properties will decline 2.8% in 2018, according to Royal LePage, from $546,444 last year to $531,333 this year. A surge in listings will push prices lower, according to John McKenzie, an agent with Royal LePage Sussex in Sechelt on the Sunshine Coast.

The Sunshine Coast is expected to see the greatest decline in recreational property values of any area in B.C., with drops of 11.1% for condos, 9.1% for oceanfront properties and 8.3% for all others.

“There’s a slowdown coming,” McKenzie said.

However, he downplayed the impact of the speculation tax announced in the provincial budget set to take effect this fall. While the official report suggests it will prompt many homeowners to sell secondary residences, McKenzie says it’s not likely to scare buyers off.

“I don’t think they’re going to help things, but I don’t think they’re going to scare anybody off,” he said. “With the changes that they made, we’ll probably be fine.”

Twenty years

Some familiar Vancouver faces were in New Brunswick at the end of May for the Royal Architectural Institute of Canada’s annual Festival of Architecture, organized around the theme “Ports and Portals: Getting There from Here.”

Getting here from there was on this columnist’s mind 20 years ago, as he set out in late June 1998 seeking broader horizons and broader opportunities.

But knowing where you’re from is key to understanding where you’re at, and a glance at the burning issues back east shows that Vancouver, for all its development pressures and debates over who’s buying what, isn’t doing badly.

Vacant buildings are an issue in Saint John, for example, not because affordable housing is in short supply but because they’re fire hazards. Opinion pages in the city last week called for their rapid demolition to remove eyesores and cut firefighting costs.

Meanwhile, dozens of residences along the lower reaches of the Saint John River remain uninhabitable following the 100-year-flood event that occurred last month. A similar event on the Fraser River would cost billions, and demands for government action would be incessant.

The issues are reminders that Vancouver, for all the challenges it faces, can count on growth to keep it planning for the future rather than grappling with an aftermath. •

pmitham@telus.net