June 28, 2016

A Seemingly Obvious Omission

The Calgary Herald reports from Canada. “The benchmark price on single-family homes in the city last month was $500,500, easing three per cent from $518,000 during the same time in 2015, says the Calgary Real Estate Board. Quick possession home buyers turning to Calgary’s northwest saw prices dip by more than $20,000 last month compared to the same period a year earlier, says Canada Mortgage and Housing Corp. The quadrant had 90 constructed but unabsorbed single-family homes, which was the most of any quadrant in the city. This statistic typically reflects the spec and show home segment. The average price on these homes in northwest Calgary was $640,951, which is down year over year from $667,423.”

“On the resale market, the most substantial setback in pricing for single-family homes came from an area that the Calgary Real Estate Board has identified as the city centre. Its benchmark price was $648,800, which is a five per cent dip year over year, says CREB.”

The Saskatoon Star Phoenix. “The market for cabins on popular lakes north of Saskatoon is ‘not especially strong,’ but price erosion caused by weak energy and commodity prices appears to be at an end, according to a local real estate agent. ‘I think it’s a little less reactive to the (economic) situation,’ said Matt Miller, an associate broker with Royal LePage Saskatoon. ‘Inventories have come up, prices have softened a little bit, but we aren’t seeing a dramatic change.’”

“Cabins in Melfort went to residents of nearby communities, while ‘financially secure millennials’ dominated the market in the Regina region. Cabins in Saskatchewan cross the price spectrum but are generally accessible only to people who can afford two properties. Miller said that means there is less pressure to sell quickly, which has contributed to higher inventories and softening prices.”

CTV News Vancouver. “B.C. Premier Christy Clark is addressing the issue of housing affordability in Metro Vancouver, appearing in a YouTube video promising the province is taking action to ease the Lower Mainland’s housing crisis. Economist Tom Davidoff called the principles a good start, but he joins the chorus of critics that say they’re baffled by a seemingly obvious omission – foreign ownership.”

“‘The most important [issue to be addressed] is the critical role of money coming in from overseas,’ said Davidoff. ‘People who don’t pay taxes here driving up real estate prices for those who do.’”

“The video includes no mention of foreign ownership, a factor that analysts and economists alike say plays a role in pricing out local families. A recent study found some 10,800 homes, many of them condos, sit empty in Vancouver. ‘How do we get control of the international money in our housing market that’s distorting prices so badly?’ NDP housing critic David Eby told CTV News. ‘It’s one thing to say you’re going to increase supply… but we have record housing starts in Metro Vancouver, and housing has never been less affordable.’”

From CBC News. “A major Chinese bank has obtained a court order in B.C. freezing the assets of a businessman accused of fleeing China and buying ‘luxury’ Lower Mainland homes after defaulting on a $10 million loan. In an application brought before a B.C. Supreme Court judge last week, lawyers for China CITIC Bank claim Shibiao Yan and his wife bought more than $8 million worth of properties in Surrey and Vancouver over a three-month period beginning in June 2014.”

“The court documents claim Yan, who was president of the Tanyuan Wood Company in Shijiazhuang, China, withdrew RMB 50 million from a line of credit he obtained on behalf of his company. The bank claims the 56-year-old provided a personal guarantee for the money. The loan came due last summer. But the bank claims Yan and his family had already fled to the Vancouver area. Yan could not be reached for comment. He was not represented at the ex parte hearing and none of the allegations against him have been proven in court.”

“Last year, Canada’s anti-money laundering watchdog FINTRAC claimed to have stepped up enforcement activities in Vancouver’s real estate market. A report prepared for the agency suggested the real estate sector was at ’significant risk’ for money laundering.”

“According to the court documents, Yan incorporated a company in B.C. called TYMY Investments in March 2014, and his 36-year-old wife paid $2.5 million for a house in Vancouver a month later. The bank claims Yan applied for the loan in June 2014, but did not reveal that he had a residence or any interests outside of China. He was allegedly given a line of credit in June 2014 and withdrew the entire amount within days. The documents claim Yan bought three homes in Surrey in the next three months, one worth $1 million, one worth $3.1 million and one worth $2.3 million.”

The National Post. “The planned auction for a Victoria mansion was scrubbed Wednesday evening after only one bidder showed up. But that bidder — a local resident — may end up owning the 7,200-square-foot heritage house. Negotiations were taking place. ‘We are going to work with that bidder privately,’ said real estate agent Andy Stephenson of Sotheby’s International Realty Canada.”

“Stephenson was optimistic about the eventual sale price, speculating it would be about $2 million. The 5 p.m. auction followed two weeks of open houses at the Samuel Maclure-designed house. The listing price for the property was $1.998 million. The minimum reserve bid was not disclosed. Stephenson had hoped that a number of bidders would be attracted to the auction, a marketing method that’s rare in Greater Victoria.”

“Stephenson estimated that about 2,000 people viewed the six-bedroom house during the open houses. There have been 2,600 hits on the video of the house posted on Sotheby’s website, he said. About 60 people showed up at the house to watch the auction play out in the 32-foot-long ballroom. Many were Rockland residents and real estate agents. Stephenson said he thinks other sellers might want to stage auctions in the future. ‘I think there are a lot of people in this room that are probably thinking about it with their own homes,’ he said.”

“The auction idea was launched at a time when Greater Victoria’s real estate market is repeatedly setting monthly sale and price records.”