Tuesday, July 7, 2009

Summer 2009 Update: Vancouver Real Estate Market June Numbers, Electric Vehicle Plug-In for New Multi-Family Projects & Vancouver Cost of Living Drops

June 2009 Greater Vancouver Real Estate Market Update

It was a June to remember for the Vancouver real estat market, as sales and prices pushed upwards amidst a renewed optimism in the global economy recovery coupled with lowered asking prices and historically low interest rates. In the Greater Vancouver area, the price of a detached house in June 2009 was about 8% higher then in February 2009 ($649,000 benchmark price) and up 3% compared to this May 2009 (benchmark price of $680,000). For June 2009, the average benchmarck price for a detached Vancouver home was above $701,000, touching this mark for the first time since last year. With signs of a Canadian economic recovery and also an end to the global recession in site, the Greater Vancouver housing prices have steadily increased since February 2009. In addition to the detached homes, the attached Vancouver homes also saw a benchmark price gain up to $441k while condos/apartments also saw a 2% rise to an average of $357k. June 2009 signified the second busiest month for number of Vancouver real estate sales in the Lower Mainland, only to be bettered by June 2005. At one point, the average Vancouver home prices dropped 15% from the height of the market in 2008 to the lowest point earlier in 2009. Right now, Vancouver housing prices are still down 8% compared to June 2008, but with a renewed optimism and more homebuyers looking to purchase at low interest rates, the trends towards higher benchmark sales prices and number of sales will likely continue through the year. In most markets, homebuyers are also seeing a shrinking number of home listings compared to last year, which is a sign of a more balanced Greater Vancouver real estate market.

According to the North Shore News, although prices are still down, values are recovering and the number of Greater Vancouver real estate sales in June 2009 were record breaking and at all time highs! Whether it is pent up demand from homebuyers who opted to stay away from purchasing last year or lower prices, North Shore real estate sales continue to increase as well through 2009, signifying a huge rebound in both property values as well as real estate sales. While the North Shore property prices are still lower than the all-time peak highs in 2007 and 2008, both West Van and North Vancouver property sales have accelerated faster then most analysts and experts had predicted. In June 2009, the North Shore (West Vancouver, District and City of North Vancouver) had four hundred and seventy two sales, as released by the Greater Vancouver real estate board on July 3, 2009. This increase in sales represents the 5th consecutive month in which the number of North Shore real estate sales has increased, which followed a 7 month period where property values plummeted. The worst month came in December 2008, when only 65 homes were sold on the North Shore. The benchmark price for a detached home in west Vancouver was still down at around $1.25 million, which represents a 16.7% decrease in value compared to last May 2008. In the North Vancouver real estate market, the values are 12% lower at a benchmark price of $812k. The rebound in North Shore property sales and that of the entire Greater Vancouver and Fraser Valley real estate markets is due in part to these drop in asking/listing prices which increases affordability for all lifestyles and age groups in addition to the lowest interest mortgage rates in the history of the country. With many people not purchasing property in 2008, these homebuyers are showing up in flocks to buy devalued Vancouver property now with interest rates as low as they are. The entire Greater Vancouver real estate market showed a 75.6% increase in number of sales over last June 2008 with 4,259 total homes changing hands, which represents the second largest sales month of all time, just behind the 4,333 sales in June 2005.

City of Vancouver Pushes for Car Plug-In Requirements for New Real Estate Developments

The City of Vancouver is pushing for a new requirement in building processes, plug-ins for electric vehicles. This is the first step in any major municipality to have this requirement for Vancouver real estate construction. Hping to build and they will come approach, any new Vancouver development, whether it be condos, townhomes or single family homes will require plug-in stations in garages or parking stalls for electric vehicles according to 24 Hours Vancouver. Vancouver developers will be required by building law to include a specified number of electric plug-in stalls for new developments depending on the size of the project for multi-family housing. As one of the defining factors of electric vehicles making it into the common marketplace, the City of Vancouver hopes that this push in new Vancouver real estate requirements will help facilitate more electric vehicle sales and thereby creating a healthier environment within our city. Currently, the City of Vancouver is asking for at least ten per cent of all parking stalls/garages to have plug-in capabilities for electric vehicles. According to the Vancouver Electric Vehicle Association, they think this is a good move by the City but says that it should become a requirement that all parking stalls for new multi-family Vancouver housing projects should have these electric plug-ins available, which will be in line with future growth, tenants and homebuyers. However, there are many local Vancouver developers who are opposed to such changes in building requirements, citing that electric vehicles are not mainstream yet. The estimated increase in building costs for the 10% of all parking stalls to have electric vehicle plug ins is a mere 0.5 per cent.

Vancouver Cost of Living Falls

Contrary to popular believe, Vancouver’s cost of living has fallen down the ranks for world class cities according to the latest 2009 Worldwide Cost of Living survey. According to Metro News Vancouver, the City of Vancouver is now 93rd most expensive city to live in, which is surprisingly tied with Panama City. Last year in 2008 Worldwide Cost of Living survey, the City of Vancouver ranked 64th (which represents a drop in 23 places for this year). Some of the major reasons for the drop is the strength of the Canadian Dollar globally, which reduces the cost of living here in Vancouver. The priciest Canadian City was Toronto at 84th, Calgary at 89th followed by Vancouver. The 2009 Worldwide Cost of Living survey covered one hundred and forty three cities in six continents and the top 2 priciest cities were in Japan (Tokyo and Osaka).

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