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House sales: It's a buyer's market for greater Vancouver

House sales: It's a buyer's market for greater Vancouver

More houses are on the market, but fewer houses are being sold and prices are flat, according to the Real Estate Board of Greater Vancouver.

More houses are on the market, but fewer houses are being sold and prices are flat, according to the Real Estate Board of Greater Vancouver.

Photograph by: Richard Buchan , THE CANADIAN PRESS

Greg Jeanine is one of hundreds of Metro Vancouver property owners frustrated by futile attempts to sell their condos, townhouses and homes in a market where sales and prices have slumped.

His two-bedroom condo in East Vancouver on Eton Street, priced around $300,000, has been on the market for three months.

September sales were 41.6 per cent below the 10-year September average of 2,597, according to the Real Estate Board of Greater Vancouver.


Nervous buyers

“There are lots of showings,” said Jeanine, 31, who wants to buy a larger townhome for his family. “People are just afraid to make a commitment to buy.

“They’re nervous because people in the news say pricings are going down,” he said.

Sutton Centre realtor Leonardo Difrancesco said it’s “shocking” Jeanine can’t make the sale.

“The condo is really aggressively priced,” he said.


Sales to pick up

Cameron Muir, chief economist of the B.C. Real Estate Association, doesn’t think sales are going to continue to be slow.

“The big story is unit sales,” said Muir.

“Prices are beginning to edge lower but I don’t anticipate any deep price decline in the Vancouver market,” he said.

Muir bases that position on the fact that interest rates are at “near historic lows,” and that the population base in Metro Vancouver and the province continues to grow along with employment.

“Full-time job growth in Vancouver has been at the 3.5- to 4-per-cent clip for several months now,” said Muir.


Buyers wait

But unit sales seem to reflect Jeanine’s experience — buyers think prices are going down so they’re waiting.

There was also an expectation of lower prices during the financial crisis in 2008.

“A lot of people waited too long [to buy] and you ended up with prices rebounding and then some by the end of 2009,” said Muir.

“It would be my contention that we’ll see unit sales pick up by the end of the year or at least early in 2013.”

The current market situation doesn’t reflect that.

The number of sales for residential property — detached, attached and apartment homes — in Metro Vancouver in September was 1,516, which is 32.5 per cent less than in September 2011, and an 8.1 per cent decline compared with August 2012.


Prices slip slightly

Prices are also flat.

The MLS benchmark price for all residential properties sold in Metro Vancouver is $606,100, a decline of 0.8 per cent compared with this time last year.

The current benchmark price is also a decline of 2.3 per cent over the past three months.

The increase of residential property listings to 18,350 — an increase of 14.1 per cent over this time last year — is another reason Real Estate Board president Eugen Klein called the condition a buyer’s market.

One of the problems, said Klein, is consumer confidence.

“Buyers think that they’ll get a better deal tomorrow so there’s no urgency to buy,” he said. “And sellers aren’t moving on prices in any significant amount.”


Mortgage changes

Also complicating the market are federal government rule changes made in July about Canada Housing and Mortgage Corporation insurance, which is required for mortgages where the downpayment is less than 20 per cent of the purchase price.

Amortization rates for such mortgages were dropped to 25 years from 30 years, which cuts the amount homeowners pay in the long-term but raises what they pay monthly.

“There’s been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of a 30-year amortization on government insured mortgages,” said Klein in a statement. “This makes homes less affordable for the people of the region.”


Fraser Valley

There’s a similar slowdown in sales in the Fraser Valley, where there was decrease of 26 per cent in September compared to September of 2011 and 20 per cent fewer sales than in August.

Prices have dipped 0.4 per cent in the last three months but they’re still 2.1 per cent higher year-over-year than 2011.



SOURCE:The Province