SIGNS MICHAEL FERREIRA URBAN ANALYTICS INC. October 24, 2014
8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0-1.0 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13-2.0 Change In Consumer Price Index Canada BC Vancouver Source: StatsCan
5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Source: StatsCan % Change in Retail Sales BC Canada
5.0 4.0 3.0 2.0 1.0 0.0-1.0 Jul-13 Aug-13 Sep-13 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 % Change in Employment Growth Canada BC Alberta Ontario Ouch! Source: StatsCan
60,900 JOBS CREATED IN BC THIS YEAR
9.0 Unemployment Rate 8.0 7.0 6.0 5.0 4.0 3.0 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Canada BC Alberta Ontario Source: BC Stats
0.8% 0.6% 0.4% 0.2% 0.0% -0.2% -0.4% -0.6% -0.8% % Change in New Housing Price Index Metro Vancouver Canada Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Source: StatsCan
20% 15% Change in New Housing Price Index Since April 2008 Toronto 15.9% 10% 5% 0% Calgary 1.6% Canada 6.4% -5% -10% Metro Vancouver -6.1% Source: StatsCan
15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 % Change in REBGV Benchmark Price Detached Townhome Condominium Source: StatsCan
INTEREST RATES
Posted Five Year Fixed Rate vs. BoC Overnight Rate 8% 7% 6% 5% 4% 4.75% 7.44% 6.40% 3.00% 5.34% 5.14% 3% 2% 1% 0% Posted 5 Year Fixed BOC Overnight Rate 0.50% 1.25% 5% 4% 3% 2% 1% 0% Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Source: Bank of Canada
PREDICTION #1 Rates aren t going anywhere anytime soon
The Quantitative Easing (QE) Conundrum
11% 10% 9% 8% 7% US Unemployment Rate: 2003-2013 7% - US Fed's target unemployment rate to commence QE tapering 10.0% 7.2% 6% 5% 4% 4.4% 6.5% - US Fed's target unemployment rate to commence rate increases 3% Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Source: Bureau of Labour Statistics Data
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable amount of time after the asset purchase program (QE) ends and the economic recovery strengthens. US Federal Reserve Committee Statement July 30, 2013
Posted Five Year Fixed Rate vs. BoC Overnight Rate 8% 7% 6% 5% 4% 4.75% 7.44% 6.40% 3.00% 5.34% 5.14% 3% 2% 1% 0% Posted 5 Year Fixed BOC Overnight Rate 0.50% 1.25% 5% 4% 3% 2% 1% 0% Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Source: Bank of Canada
18,000 15,000 12,000 9,000 6,000 3,000 0 3,000 BC Net Interprovincial and International Migration Net Interprovincial Migration Net International Migration Source: StatsCan
Third Quarter Net Interprovincial Migration Analysis Others: +131 Quebec: +482 Ontario: +474 Saskatchewan: -315 Manitoba: +76 Alberta: -2,106-3,000-2,500-2,000-1,500-1,000-500 0 500 1,000 Source: StatsCan
International Migration still the primary driver of Metro Vancouver s Housing Market
41,569 Annual Average Net International Migrants to BC since 2004
16% Average Annual proportion of International Migrants to BC
14% Average Annual proportion of International Migrants to Metro Vancouver
69% Average Annual Proportion of International Migrants to BC from Asia-Pacific
8,752 Total Number of Investor Class Applicants Processed in 2012
5,637 (64%) Investor Class Applicants Processed through Hong Kong and Beijing in 2012
84,148 Total Investor Class Applicant Inventory as of April 2013
59,116 (70%) Investor Class Applicant Inventory at Hong Kong and Beijing
Business Challenges for New Investor Class Immigrants to Vancouver / Canada
Language Culture Processes & Regulations Higher Wages Size of Market
What s to like about Vancouver for Chinese Investor Immigrants?
Convenience 130 ish direct flights Ease of integration
PREDICTION #2 New Chinese Immigrants will impact our housing market for the foreseeable future
THE NEW HOME MARKET
Concrete Condominiums Year-to-Date Sales Comparison 4,253 3,075 2,818 2,546 YTD-2010 YTD-2011 YTD-2012 YTD-2013 Source: UAI New Home Source
Wood Frame Condominiums Year-to-Date Sales Comparison 2,943 2,502 1,690 1,832 YTD-2010 YTD-2011 YTD-2012 YTD-2013 Source: UAI New Home Source
Townhomes Year-to-Date Sales Comparison 2,108 1,622 1,647 1,425 YTD-2010 YTD-2011 YTD-2012 YTD-2013 Source: UAI New Home Source
Number of Units 12,000 10,000 8,000 6,000 4,000 2,000 Quarterly Sales vs. Unsold Inventory Total Sales 8,979 Released Inventory 2,650 0 Source: UAI New Home Source
Number of Units 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Condominium Inventory By Construction Status Concrete Condos Wood Frame Condos Pre-Construction Under Construction Complete Source: UAI New Home Source
Total Standing Inventory Trend 2,135 1,935 1,896 1,532 1,725 1,653 Q2-2012 Q3-2012 Q4-2012 Q1-2013 Q2-2013 Q3-2013 Source: UAI New Home Source
Number of Units 400 350 300 250 200 150 100 50 0 Standing Inventory by Sub-Market Source: UAI New Home Source
Some bright spots
Richmond 878 concrete condos sold this year 660 in last two quarters
Richmond Wood frame condo demand still strong Alexander Court sells 52 units at launch
Tri Cities Nearly 500 concrete condos sold this year 74% increase over 2012
Downtown Concord does it again with One Pacific 300 sales in four months
Vancouver West Cambie Corridor UBC Product, Product, Product
Vancouver East Wall Centre Central Park Shoreline at River District
Burnaby Needs more product!
North Shore The proverbial hare slow and steady.
PREDICTION #3 2014 will be another grinding year
Differentiation Through product design and innovation
BosaSpace
Differentiation Through appropriate product mix and positioning
Differentiation Through customer care pre and post sales
PREDICTION #4 Supply will remain constrained in urban markets
Get ready for more of this
PREDICTION #5 Urban master plan mania
Oakridge
Quebec & 1 st Ave
Brentwood
Miscellaneous Musings Chinatown & East Hastings will take time
Miscellaneous Musings Surrey City Centre will surprise