Buyer Activity Brings Greater Stability to Housing Market

 

VANCOUVER, B.C. – May 4, 2009 – With more buyers and fewer homes for sale in recent months, the Greater Vancouver housing market has entered a more moderate and balanced state.

 

For the sixth consecutive month, new listings for detached, attached and apartment properties declined in Greater Vancouver, down 33.7 per cent to 4,649 in April 2009 compared to April 2008, when 7,010 new units were listed. The total number of property listings on the Multiple Listing Service® (MLS®), while slightly down compared to last month, remains unchanged compared to the same period in 2008.

 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 2,963 in April 2009, a decline of eight per cent from the 3,218 sales recorded in April 2008, and an increase of 31 per cent compared to last month.

 

“We’re seeing greater balance in the housing market, as evidenced by a strong sales to active listings ratio of over 19 per cent,” Scott Russell, REBGV president said. “The result is a relatively stable market in which homes are being realistically priced.

 

“The bridge between buyer demand and housing supply is continuing to narrow, which, as we see, helps bring stability to home prices,” he said. “The trends in our housing market over the last couple of months offer a much more comfortable, historically normal set of conditions.”

 

Sales of detached properties declined eight per cent to 1,190 from the 1,293 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties declined 12.2 per cent from April 2008 to $675,268.

 

Sales of apartment properties in April 2009 declined 10.5 per cent to 1,179, compared to 1,317 sales in April 2008. The benchmark price of an apartment property declined 12.6 per cent from April 2008 to $340,203.

 

Attached property sales in April 2009 are down 2.3 per cent to 594, compared with the 608 sales in April 2008. The benchmark price of an attached unit decreased 9.7 per cent between April 2008 and 2009 to $431,759.

 

Bright spots in Greater Vancouver in April 2009 compared to April 2008:

 

Detached:

Vancouver West        up 59.5 per cent (193 units sold from 121)

 

Attached:

Port Coquitlam          up 69.6 per cent (39 units sold from 23)

Richmond                  up 17.9 per cent (132 units sold from 112)

Vancouver West        up 46.3 per cent (98 units sold from 67)

 

Apartments:

North Vancouver      up 29.2 per cent (84 units sold from 65)

 

To read the entire news release, or to find more interesting articles and statistics, visit http://www.rebgv.org.

 

 

 

Mercer's 2009 Quality of Living Survey Highlights

OTTAWA - The Bank of Canada has taken its influential target interest rate to the lowest practical level in an effort to combat what it says is deeper and more widespread global recession.

            The central bank sliced the overnight rate in half to 0.25 per cent - the lowest it says is practical - and signaled strongly it will have to keep it there until at least mid-2010.

            In addition, the bank has extended the term of its purchase and resale agreements it uses to inject liquidity into money markets from one-and-three months to six-and-12 months, while setting minimum and maximum bids that correspond to the historically low target rate.

            The bank said it will target a daily level of settlement balance in the financial system at $3 billion, a move it says will help drive the overnight rate to the bottom of the trading band.

The Bank of Montreal (TSX:BMO) was the first of Canada's major banks to announce that it would lower its own prime rate in step with the central bank, dropping the benchmark around which it calculates variable mortgages and other loans to 2.25 per cent. Shortly after, Royal Bank (TSX:RY) said it too would lower its prime rate to 2.25 per cent, signaling that the other chartered banks would likely follow suit.

            The dramatic actions - and more are expected Thursday when bank governor Mark Carney unveils options for increasing the money supply - signal a new and darker view of the global and domestic recession than the Bank of Canada has previously admitted to.

            "In an environment of continued high uncertainty, the global recession has intensified and become more synchronous since (January)," Carney wrote in an unusually lengthy note accompanying the interest rate decision.

            "Deteriorating credit conditions have spread quickly through trade, financial and confidence channels. While more aggressive monetary and fiscal policy actions are underway across the G20 (countries), measures to stabilize the global financial system have taken longer than expected to enact."

As a result, Carney has basically thrown out the playbook for the Canadian economy that he outlined in January. Then, the recession was supposed to be over by the summer and accompanying growth was to built in the third quarter on the way to a robust recovery in 2010, with output growth of 3.8 per cent. Total economy shrinkage this year would be limited to 1.2 per cent.

            Now Carney says the economy won't stop falling until at least the fourth quarter and in total will contract three per cent this year. That is in line with the Organization for Economic Co-operation and Development projection and that of a growing number of private sector economists.

            Carney remains a relative optimist on how strong the rebound will be, however, predicting a bounce-back of 2.5 per cent next year and 4.7 per cent in 2011. While lower than his previous prediction of 3.8 per cent growth in 2010, it is still far ahead of the OECD's 0.3 per cent flatline forecast for next year.

            "Given significant restructuring in a number of sectors, potential growth has been revised down," he says. "The recovery will be importantly supported by the bank's accommodative monetary stance."

The new pessimism, or realism as some economists would call it, has increased the odds that Carney will do more than outline options for so-called quantitative easing later this week - a technical way of saying printing more money to get credit markets functioning better - but that he will soon move into the uncharted territory.

            The central bank sees no immediate danger of inflation for all the stimulus it is injecting into the dormant economy. In fact, Carney said he expects inflation to be minus 0.8 per cent in the third quarter and not to return to the central bank's desired two-per-cent target until the third quarter of 2011.