The big news this month is the report on money laundering recently released by the provincial government’s new expert panel, chaired by former deputy attorney general Maureen Maloney. The report concluded “that almost five percent of the value of real estate transactions in the province result from money laundering investment.” “Successfully reducing money laundering investment in B.C. real estate should have modest but observable impact on housing affordability,” read the report. In other words, if the government is indeed successful in reducing the amount of money laundering investment, real estate prices will go down. The report suggests that money laundering in real estate happens across the country with Ontario seeing the largest amount of money laundered through real estate. Attorney General, David Eby, now acknowledges that when a “student” purchased 15 properties in the same Vancouver condo building in 2001 for $2.9 million, that was an example of money laundering. Today, the B.C. government announced there will be a public inquiry into money laundering in the province’s economy.
The Bank of Canada continues to hold the overnight rate to 1.75%. The bank is now projecting growth in the economy at 1.2% for 2019, which is down from its January projection of 1.7%. Analysts do not expect the bank to raise its rate again in 2019.
We are now in the middle of the spring, real estate market. Prices in the Fraser Valley have stabilized with some areas and property types showing price increases. In the Greater Vancouver area, prices are still falling in many areas.
Sales are picking up in the Fraser Valley – sales for April were only 19% lower than they were one year ago. Although that doesn’t seem like an improvement, sales were down 26% in March, 29% in February and 35% in January. So sales are picking up. The majority of the Fraser Valley experienced a sellers market in April. Prices for condos have gone up about 3% in the past three months while townhouse prices have remained unchanged. Prices for detached homes have increased in many areas over the past three months. Even South Surrey showed a 1.8% increase in the past three months despite being in a buyers market. Note, over the past three years, the benchmark price for a detached home in South Surrey has gone up 8% where most other areas in the Fraser Valley have gone up about 25%. With prices stabilizing, now is the time to buy in South Surrey.
Cloverdale, Langley, Abbotsford and Mission all experienced strong, sellers markets in April, especially for attached properties. The average days on market for all property types in these areas was 17.
HPI® Benchmark Price Activity
- Single Family Detached: At $964,600, the Benchmark price for a single family detached home in the Fraser Valleyincreased 0.2% compared to March 2019 and decreased 4.8%compared to April 2018.
- Townhomes: At $521,800 the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.9% compared to March 2019 and decreased 5.1% compared to April 2018.
- Apartments: At $420,700, the Benchmark price for apartments/condos in the Fraser Valley increased 0.6% compared to March 2019 and decreased 6% compared to April 2018.
Below average sales continued to plague the Greater Vancouver area. Last month’s sales were 43.1% below the 10-year April sales average. Richmond had the lowest sales ratio with only 5% of listings for detached homes selling in April. Most areas continued in buyers markets for detached properties. Coquitlam and east of Coquitlam were in balanced markets. Prices for detached homes in Vancouver, west side, Richmond, North Burnaby and West Vancouver continued to fall last month while other areas remained stable. Vancouver, west side, prices are now 8% below where they were three years ago. Richmond and North Burnaby prices are about 3% below where they were three years ago and West Vancouver prices are 14% lower than three years ago.
The attached market remained in a balanced to sellers market with the exception of West Van and Tsawwassen which were in buyers markets last month.
HPI® Benchmark Price Activity
- Single Family Detached: At $1,425,200, the Benchmark price for a single familydetached home decreased 0.8% compared to March 2019 and decreased 11.1% in the past year.
- Townhomes: At $783,300, the Benchmark price for a townhome was unchanged compared to March 2019 and decreased 7.5% in the past year.
- Condos: At $656,900, the Benchmark price for a condo was unchanged compared to March 2019 and decreased 6.9% in the past year.