CMHC reported on December 10th, 2007 that November 2007 was the highest month in 30 years for housing starts. That’s big news. Over the same period last year, housing starts are up a whopping 92%!

 Now…before we get too excited about this news there might be a reasonable explanation. I would suspect that a large portion of these starts might be pent-up from the prolonged civic strike in Vancouver. It likely doesn’t explain the entire increase, but a number of these starts would likely have been spread out over the past couple of months if the strike hadn’t happened.

 However, what I find interesting is the big increase we’re seeing in the construction of condominium units. The number of single-family homes is actually dropping (364 in November 2007 vs 403 in November 2006) while condo starts are booming (2,340 vs 1,002).

“There has been a 30% increase in multi-family starts (so far this year) and it’s mainly Vancouver and Surrey (multi-family projects) that are driving the results.” Robyn Adamache, an analyst with CMHC said in an interview with the Vancouver Sun.

She expects to see housing starts begin to trend lower next year. Pointing to the difficulty in sourcing skilled labour, as well as affordability issues for consumers, she feels that housing starts have likely peaked for the time being. However, she indicates that these are the same reasons that we are seeing a boom in multi-family starts.

Builders are building what people can afford. Currently, the average price for a home in the reporting area for the Real Estate Board of Greater Vancouver is $813,137. An average condominium is nearly half the price at $418,709. Currently, there are over 75 listings of condos that are selling for under $250,000 (not new, mind you).

The affordable end of the market is where there is currently very strong activity. I believe that we’ll continue to see incredible growth in demand by both first-time buyers and investors in the condominium market, making it an excellent opportunity to put a little money in your pocket.

Sebastian Albrecht, Vancouver Realtor with Royal LePage

The CMHC announced it’s rental vacancy statistics for the year this past week. If you are a landlord, or a tenant, then you’re probably already aware that the rental market in Vancouver is incredibly tight. For the province of BC, rental vacancy rates fell for the fourth year in a row.

Caroline Frketich said, in a Vancouver Sun interview, “Increased job opportunities, the rising cost of homeownership, immigration and longer completion times on new multiple-unit projects intended for homeownership were responsible for boosting rental demand in BC.” She added that, “the West has definitely seen more migration from other parts of the country.”

The result? In Vancouver our rental vacancy rate is a mere 0.5%! Wow.

 That’s bad news for tenants. It’s incredibly difficult for them to find good quality, affordable accomodation. However, as a landlord, or potential landlord, that’s great news. You can afford to be picky about the people you are willing to invite to live in one of your largest investments. You can also ask for higher rents.

 I’ve been noticing this past year that rents really seem to be picking up. Not every landlord appears to be aware of this yet, but rents are finally beginning to rise to match the phenomenal growth in real estate values we’ve seen over the past few years. My evidence is only anecdotal, but I’m seeing some studio apartments downtown that sell for $235,000 rent for $1,300/month (that’s a STUDIO!)…and basement suites renting for $1,800 in a house worth $600,000.

If you are planning on renting out your basement, or you are thinking of purchasing a rental property be certain to do your homework first. Take a look at the newspaper classified ads, or online sources to see what comparable properties are renting for. I think that you’ll be surprised.

Sebastian Albrecht, Vancouver Realtor with Royal LePage

So, there I was last Friday morning. Bleary-eyed I opened my door to begin my weekday ritual. Pick up the paper off of my front door-step and climb back up the stairs to browse the Vancouver Sun while I eat my breakfast…and attempt to clear the cobwebs from my head that have accumulated overnight.

On this particular morning, I was shocked to see that an alarming headline caught my attention. The prime space of the paper was dedicated to a story entitled, “Fraser Valley House Prices at 8-Month Low”. Honestly, it was a shock to me. The Fraser Valley is not an area that I specialize in but nothing had given me any indication that there was anything amiss so close to Vancouver.

The paper reported that the average sale price fell for the second month in a row to $511,176 this past November to a level not seen since last March. A dramatic above-the-fold graphic showed the average change by specific area in the region (Surrey, -2.1%; White Rock, -16.3%; Langley, -1.3%; Abbotsford, -0.1%; Mission, -6.1%).

Granted, these numbers bear some explanation. Realtors will point out that November is an historically slow month for sales. It’s the beginning of a seasonal slump that happens because people begin to think more about the holidays, buying presents and potential vacations than about finding a new home.

The Fraser Valley Board’s numbers tend to fluctuate greatly from one month to another due to the fact that fewer transactions occur in it’s jurisdiction. Averages can get skewed by exceptionally high or low numbers when the sample is smaller. In my own experience with statistics, the median number is a more reliable indicator when comparing numbers with smaller samples. In this case, the median numbers reveal an actual INCREASE (Surrey, +5.2%; White Rock, +1.7%; Langley, +1.1%; Abbotsford, +8.5%; Mission, +5.5%).

In addition, unmentioned in the newspaper article is that the average price ROSE when compared to the year ago period. The average price for November 2007 was up 4.9% over November 2006.

Sebastian Albrecht, Vancouver Realtor with Royal LePage

The Real Estate Board of Greater Vancouver released the statistics for November 2007. Statistics showed that sales rose by 22.2% over the same period one year ago (from 2,358 to 2,883). Of course, the comparison was an easy one as last November was a very weak month (attributable, perhaps to very poor weather). Listings increased slightly by 6.6% (from 3,168 in November 2006 to 3,377 this November).

“The housing market continues to be strong, ” says REBGV president Brian Naphtali. “November figures show strong growth compared to last year, are basically on par with figures from 2005, and are 16% higher than the same period in 2004. 

“Affordability is a key question,” Naphtali says. “Our data indicates that about 60% of residential homes purchased in November were multi-family, which includes condos and townhomes. The benchmark price for a condo in Greater Vancouver is about $375,000. However, there are units available for considerably less than this price. For example, the benchmark for condos in Port Coquitlam in November was $243,624; in Maple Ridge, $254,703; and in Coquitlam, $283,830.”

Sebastian Albrecht, Vancouver Realtor with Royal LePage