BCREA ECONOMICS NOW

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SELLER'S REMORSE NOT REWARDED

Too often this column focuses on a REALTOR®'s error or mistake resulting in the REALTOR®'s censure by either a court or the Real Estate Council of British Columbia. Such columns, while concentrating on the negative aspects of practice, are essential in providing REALTORS® with an understanding of the appropriate standard of care and duty expected of them in their day-to-day practice. With that in mind, it is refreshing to report that not all practice is viewed through such a negative lens.

In a recent decision of the BC Supreme Court,¹ a former client blamed their listing agent for not obtaining them substantially more money from the sale of their house. They had listed their house with several REALTORS® with no success. The sellers chose their last REALTOR®, whom they eventually sued, in large part because she was the listing agent for a property across the street.

The sellers listed their property for $10,000 less than the property across the street. They received an offer close to $100,000 below the listing price. They alleged that the listing agent "pressured" them into accepting the low offer. The listing agent deposed that she had told the sellers it was up to them whether to accept, reject or counter the offer. Although not known to the sellers at the time, the house across the street sold for almost an identical amount. After accepting the offer, the sellers learned of another house in the neighborhood that had sold for almost $225,000 more than theirs. The sale of this neighboring property was entered into a week before the sellers accepted their offer, although that sale did not become unconditional until some two weeks after the sellers had accepted their offer. The sellers deposed that they would not have accepted the offer they received had the listing agent advised them of the other sale.

The sellers claimed that the listing agent was negligent in not providing them with a comparative market analysis that would have disclosed all the properties in the neighborhood, negligent in not discovering the pending sale of the property that sold for close to $225,000 more than theirs, and in a conflict of interest by concurrently listing two competing properties across the street from each other.

The Court dismissed all of the sellers' claims. While agreeing that the listing agent owed a duty of care to the sellers, the Court found that the sellers had not provided any evidence as to what that standard of care might be and, as such, had not established that the listing agent had breached the standard of care.

On the issue of the alleged conflict of interest, the Court concluded that there was no authority for the proposition that acting as the listing agent for two properties in the same neighborhood gave rise to a conflict of interest; if it did, the sellers had expressly waived such conflict, as they were fully aware of the other listing at the time they engaged the listing agent.

The sellers' main complaint was that they were not made aware of the pending sale, which turned out to be close to $225,000 more than the offer they accepted. However, the Court concluded that those details would not have been available to the listing agent until after that pending sale had become unconditional, which was after the time the sellers were considering their offer. In dismissing the claim, the Court concluded that "the defendants did not have a legal duty to obtain the best possible price for the property. Rather, a REALTOR® has an obligation to act in accordance with the applicable standard of care for giving advice on price for a property."

It is not unusual for sellers or buyers, with 20/20 hindsight, to conclude they should not have entered into a particular transaction and to claim that their REALTOR® "pressured them into entering into the agreement" or conversely that their REALTOR® "should never have allowed them to enter into the agreement." It is the REALTOR®'s function to make sure that their client has all pertinent and available information before them, so that the client may make an informed decision. It is not the REALTOR®'s function to make that decision for them.

Brian Taylor
Norton Rose Fulbright LLP

http://www.bcrea.bc.ca/news-and-publications/economics/video-webcasts

Vancouver, BC – May 15, 2017. The British Columbia Real Estate Association (BCREA) that a total of 9,865 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in April, down 23.9 per cent from the same period last year. Total sales dollar volume was $7.19 billion, down 25.4 per cent from April 2016. The average MLS® residential price in the province was $728,955, a 2 per cent decrease from the same period last year.

“BC home sales are on an upward trend this spring, led by a sharp increase in consumer demand in the Lower Mainland," said Cameron Muir, BCREA Chief Economist. The seasonally adjusted annual rate (SAAR) of home sales was over 106,000 units in April, significantly above the five-year SAAR for April of 89,000 units.

The supply of homes for sale declined 17 per cent from April 2016. On a seasonally adjusted basis, active residential listings have declined 50 per cent since 2012 and are now at their lowest level in over 20 years. The imbalance between supply and demand is continuing to drive home prices higher in most regions, further eroding affordability.

Year-to-date, BC residential sales dollar volume was down 31.8 per cent to $21.3 billion, when compared with the same period in 2016. Residential unit sales declined 25.0 per cent to 30,757 units, while the average MLS® residential price was down 9.2 per cent to $692,220.

Visit my site at www.YourLuckyIrishRealtor.com for further stats, buying or selling tips, and much more.

My Best,

Arran

First Time Home Buyers' Program

BCREA ECONOMICS NOW

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Canadian media found an increasing number of listed international students, most of whom are Chinese students, buy expensive houses in Vancouver through mortgage. The media caution about the possible loophole for such international investment.

Vancouver Sun reported on Wednesday that the buyers of a total of 9 real estates in Vancouver's Point Grey, worth a total of 57 million Canadian dollars (CAD), were listed as international students, and all of them were thought to be Chinese students. Bank mortgages of up to 40 million CAD were used to purchase the properties.

According to Vancouver Sun, Chinese student Xuan Kai Huang bought a house there for just over 7 million CAD (5.5 million USD) and re-sold it for over 8 million in May this year. Huang earned over 1 million CAD (900 thousand USD) through the re-sale.

An investigation by The Globe and Mail said that non-Canadian citizens do not need to show income verification certificates if they can pay a set down payment when applying for mortgages in Vancouver.

This year real estate prices rose rapidly with a surge of international investment. Vancouver Sun urged the Canadian government for more control over banks providing mortgages to non-Canadian citizens.

In response to rising real estate price, the provincial government of British Colombia levied a 15% property transfer tax to non-Canadian citizens buying Vancouver residential houses or condos.

According to Cooper, the Bank of Canada's limited ability to offset a negative shock has the bank signalling the need for fiscal measures and risk-limiting regulations to lessen the gap between household debt and assets.

The Bank of Canada has said the high debt level posed a vulnerability for the financial system, and that the amount of debt compared to disposable income was becoming alarming. As as result, the ratio of household debt to disposable income (excluding pension entitlements) rose to 167.6%, up from 165.2% in Q1.

"The upward trend in household debt, which started as far back as we have data - 1990 - is showing no signs of ending anytime soon", said Benjamin Reitzes, economist at BMO Capital Markets, citing rising house prices in Canada's biggest cities, led by Toronto, and weak gains in hourly wages.

Sales of existing Canadian homes fell in August, the fourth straight monthly decline, with sales in Vancouver tumbling almost 19 percent as a tax on foreign buyers doused activity in Canada's most expensive market, the Canadian Real Estate Association said in a report that also predicted prices will start to fall in 2017.

Victoria Property Sales Continue Record Breaking Pace

September 1 2016, Victoria, BC

A total of 883 properties sold in the Victoria Real Estate Board region this August, an increase of 19.2 per cent compared to the 741 properties sold in August last year.

"August is a record breaker in more than one way. For the sixth consecutive month, we have a sales record with more sales than any other month of August on record," says Mike Nugent, 2016 President of the Board. "We also have the lowest number of listings available for sale in an August than we've seen in the last twenty years. That lack of inventory will continue to put pressure on pricing. Sales would be even higher were there more inventory available for buyers to purchase. Regardless of the low inventory, it's safe to say that by mid-September we will have surpassed the number of sales for all of 2015, with four months remaining in the year."

Inventory levels remain lower than last year, with 2,094 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of August 2016, 43.2 per cent fewer than the 3,688 active listings at the end of August 2015.

"As we saw last month, the expected seasonal slowdown continues as we move towards the autumn," adds Nugent.  "August tends to be the slower summer month, though the year-over-year sales numbers are very strong. This shows continued consumer confidence in the Victoria real estate market. It is early to determine a trend, but we don't see any early indications that the foreign investment Property Transfer Tax implemented in Metro Vancouver has impacted sales to any extent in Victoria at this time."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in August, 2015 was $603,200. The benchmark value for the same home in August 2016 has increased by 23.8 per cent to $746,900

Call me at 250.884.3980 to discuss any real estate matter and chat about the stats or the recommendations in the IAG report.

For immediate release

Vancouver, BC – May 13, 2016. The British Columbia Real Estate Association (BCREA) reports that a record 12,969 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in April, up 30.3 per cent from the same month last year. Home sales last month beat March’s record of 12,560 units. Total sales dollar volume was $9.64 billion in April, up 52.7 per cent compared to the previous year. The average MLS® residential price in the province was up 17.2 per cent year-over-year, to $743,640.

“Housing demand is exceptionally strong across the southern regions of the province,” said Cameron Muir, BCREA Chief Economist. “Consumers appear to be particularly active in the Vancouver Island, the Fraser Valley and the Thompson/Okanagan regions.“

“Strong employment growth is helping underpin consumer confidence,” added Muir. The BC economy employed more than 78,000 additional workers during the first four months of the year, an increase of 3.5 per cent compared to the same period last year.

The year-to-date, BC residential sales dollar volume increased 64.3 per cent to $31.2 billion, when compared with the same period in 2015. Residential unit sales climbed by 36.2 per cent to 28,028 units, while the average MLS® residential price was up 20.6 per cent to $761,860.

For immediate release

BC Housing Demand Forecast to be Strongest Since 2007
BCREA 2015 Second Quarter Housing Forecast

Vancouver, BC – June 1, 2015. The British Columbia Real Estate Association (BCREA) released its 2015 Second Quarter Housing Forecast today.

“More robust economic growth, strong consumer confidence and rock-bottom mortgage interest rates are expected to push housing demand this year to its highest level since 2007,” said Cameron Muir, BCREA Chief Economist.  

Multiple Listing Service® (MLS®) residential sales in British Columbia are forecast to rise 2.4 per cent to 86,050 units this year and a further 3.9 per cent to 89,400 units in 2016. The ten-year average is 82,100 unit sales. A record 106,300 MLS® residential sales were recorded in 2005.  

The average MLS® residential sales price is forecast to rise 4.5 per cent to $594,000 this year, with most of the upward pressure being exhibited on the South Coast. Elevated consumer demand is expected to be partially offset by resale inventories and additions to the housing stock in 2016. As a result, the average MLS® residential sales price is forecast to increase by 2.4 per cent to $608,500 next year.

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To view the full BCREA Housing Forecast Update, click here.

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