UDI Capital Region: Growth & REAL ESTATE thoughtful Andrew Ramlo, VP, Market Intelligence Rennie Group
Today's Roadmap: - Current Market Stats - The Drivers To - To 2021 & Beyond
Current Market stats ALL PROPERTY SALES 1,200 1,000-17% 1,173 800 768 635 2017 Sales Victoria Metro Region 600 400 200 10yr August Average = 557 +14% 0 Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17
Current Market stats ALL PROPERTY LISTINGS 4,500 4,000 3,500-57% 3,000 2,500 10yr August Average = 2,796 2017 Listings Victoria Metro Region 2,000 1,500 1,000 500 +5% 0 Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 1,645 1,561
Current Market stats DETACHED LISTINGS 2,500 2,000-34% 1,500 10yr August Average = 1,392 2017 Listings Victoria Metro Region 1,000 500 925 0 Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 sales vs August average 10%
Current Market stats CONDO LISTINGS 1,400 1,200-49% 1,000 10yr August Average = 896 800 2017 Listings Victoria Metro Region 600 400 200 16% 0 Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 456 sales vs August average
Current Market stats TOWNHOUSE LISTINGS 500 450 400 350-57% 300 10yr July Average = 292 2017 Listings Victoria Metro Region 250 200 150 100 50 18% 127 0 Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 sales vs August average
Current Market stats SALES TO LISTINGS RATIO 70% 60% 65% 50% 40% 49% 39% 2017 Signs of a TIGHT regional market 30% Sellers 20% Balanced 10% Buyers Market 0% Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 20% 12%
Current Market stats BENCHMARK PRICES $700,000 $600,000 Benchmark August +17% +16% +13% Detached $694,500 All Types $620,700 Townhouse $554,400 2017 Signs of a TIGHT regional market $500,000 $400,000 $300,000 $200,000 $100,000 $0 Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 Condo $435,200 +22%
Current Market stats LISTINGS & BENCHMARK PRICES 4,500 4,000 3,500 benchmark $620,700 3,000 2017 Signs of a TIGHT regional market 12 month average 2,500 2,000 1,500 1,561 1,000 500 0 Aug '07 Aug '08 Aug '09 Aug '10 Aug '11 Aug '12 Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 1,645
Today's Roadmap: - Current Market Stats - The Drivers To
The Drivers To 3,000 2,500 Housing Supply & Occupancy Demand, Victoria Metro Region 1996/97 to 2015/16 actual, 2017 Estimated CMHC Starts Completions 2,933 3,105 2,902 2017 Housing STARTS & Completions 2,000 1,500 1,000 500 0 1,427 858 1,233 1,236 2,370 1,533 1,602 1,662 1,993 1,618 1,045 1,561 1,983 1,557 552 1,913 1,904 2,404 2,303 2,732 1,787 2,694 demand increment 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
The Drivers To 2017 Housing STARTS & Completions 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Housing Starts & Completions, Victoria Metro Region 1996/97 to 2015/16 actual, 2017 estimated (July) CMHC 945 711 729 679 758 1,119 1,266 1,304 1,179 1,272 1,166 977 895 1,223 891 752 650 734 882 1,201 1,399 366 253 611 193 506 225 742 1,059 879 1,467 1,413 928 139 895 751 948 1,035 581 1,126 1,732 1,503 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Ground Oriented Apartment
The Drivers To 2017 Foreign BUYERS FOREIGN BUYERS in the CAPITAL REGION 8% 6% 4% 2% 0% 4.1% 64 3.6% 3.6% 3.6% 7.2% 6.8% 63 4.7% 5.3% average: 4.8% 5.0% 4.5% 4.0% 5.0% 53 46 47 39 40 39 41 42 30 32 June July August September October November December January February March April May
The Drivers To 2017 BC Home PARTNERSHIP BC HOME Partnership assists BC residents who are first-time homebuyers by providing interest-free down payment assistance loans. The 25-year loans are interest free for 5 years, are capped at $37,500, to a maximum purchase price $750,000, and are registered on the title of the home.
The Drivers To 2017 BC Home PARTNERSHIP 2,623applications 1,135 funded $16.5m in loans ($14,537/ea.vs.$37,500) Q1: 88 funded in CRD with 1,844 total sales, BCHP represented 5% of sales through Q1 of 2017
The Drivers To HISTORICAL GDP CHANGE, 2015-16 BC Ontario Manitoba 2.1% 2.5% 3.2% Quebec 1.4% NB 1.3% PEI 1.2% Strong Recent GDP Growth Canada NS 1.1% 1.1% Sask -0.9% Nfld -1.3% Alberta -3.1%
The Drivers To EMPLOYMENT CHANGE, 2015-16 4.0% 3.0% 4.7% 3.5% Strong JOB GROWTH in BCs Metro regions 2.0% 1.0% 0.0% -1.0% -2.0% 1.2% 0.01% 0.00% -1.5% Toronto Calgary Edmonton Abbotsford Vancouver Victoria
The Drivers To Strong JOB GROWTH in BCs Metro regions 2010-16 EMPLOYMENT CHANGE Greater British Vancouver Columbia +7% +156,500 jobs +13% +158,700 Greater Victoria +3% +3,300 Rest of BC -0.7% -5,500
The Drivers To UNEMPLOYMENT RATE 10.0% 9.0% 8.0% 7.0% 6.0% Victoria Vancouver Toronto Edmonton Calgary Canada 9.5% 7.9% 6.9% 6.8% Continuation of LOW & DECLINING unemployment rate 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 5.1% 4.3% 12 month moving average 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
The Drivers To PROJECTED GDP CHANGE, 2017-18 AVG 2017-18 Big Bank Consensus Real GDP Growth (%) Alberta 2.8% BC 2.6% Ontario 2.5% Canada 2.4% Manitoba 2.1% Quebec 2.0% Consensus OUTLOOK of the Big 5 Banks Sask PEI NS NB 1.2% 1.0% 1.4% 2.0% Nfld -0.8%
The Drivers To HISTORICALLY LOW MORTGAGE RATES 20% 15% 10% The Interest Rate 5% 4.84% 3.39% environment 3.14% 0% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5 year 3 year 1 year
The Drivers To The Interest Rate environment
The Drivers To +0.25% in the target rate @ 2.85% @ 3.10% $725,295 $708,363 Let s assume: $100K HH Inc. $100K DP 25 year am. 35% GDS -2% in purchasing power A 0.25% increase in the interest rate costs an additional ~$13/month per $100,000 borrowed
The Drivers To Interest Rate Environment Consensus OUTLOOK of the Big 5 Banks DECEMBER 2018 OVERNIGHT TARGET RATE > BMO Capital Markets: 1.50% > TD Economics: 1.25% > CIBC World Markets: 1.50% > Scotiabank: 1.25% > RBC: 1.50%
The Drivers To The NeW Osfi Proposal Let s assume: $100K HH Inc. $100K DP 25 year am. 35% GDS +0.25% @ 2.85% @ 3.10% $725,295 $708,363-2% +2.00% @ 4.85% $606,468-16% in purchasing power
The Drivers To NDP/Green POLICY s Increase in the Foreign Buyer Tax Speculation & Vacancy Tax Principal Residence Capital Gains Tax HOG Adjustment More Progressive Property Tax
The Drivers To growing HOUSING equity HOUSING EQUITY 40,000 30,000 20,000 10,000 0 Victoria Metro Region's Mortgage Free Housing 27,100 25,688 Number of Homes by Age 15,901 10,997 7,168 1,445 421 1,508 1,990 34,361 29,981 26,274 28,070 22,668 21,897 20,833 Number of Owned Homes 17,600 15,589 13,343 14,186 100% 75% 50% 25% Number of Mortgage Free Homes 5,802 Under 25 years 25-34 years 35-44 years 45-54 years 55-64 years 65-74 years 75 years and over 0%
The Drivers To HOUSING EQUITY 40,000 30,000 29,981 69% EST. number of mortgage 27,100 free households: 25,688 54,012 26,274 28,070 22,668 20,000 51% Est. value of owned Number MFree of Homes dwellings: by Age 21,897 20,833 $868,000 Number of Owned Homes 17,600 Est. growing total mortgage-free equity: 15,901 $46 BILLION 15,589 29% 28% 13,343 14,186 10,000 HOUSING 10,997 EST. number of mortgage free 55-74 s: 29,700 Number of Mortgage Free Homes 7,168 14% 13% EST. equity total 55-74 s 5,802 1,445 mortgage-free equity: $27B 421 1,508 1,990 0 Victoria Metro Region's Mortgage Free Housing 34,361 % Mortgage Free Under 25 years 25-34 years 35-44 years 45-54 years 55-64 years 65-74 years 75 years and over Their Kids entering the housing market 29,700 81% 100% 75% 50% 25% 0%
The Drivers To growing HOUSING equity & the impact on prices $75,706 Couple family households 4.64% Interest Rate 30% Gross Debt Service 25 Yr. Amortization $331,976 Maximum Loan $17,472 5% down $349,499 purchase price $93,186 Bank of M&D (mom & dad) $110,659 25% down $238,790 reduce mortgage & pmts or $442,635 purchase price
The Drivers To growing HOUSING equity & the impact on prices $75,706 Couple family households 4.64% Interest Rate 30% Gross Debt Service 25 Yr. Amortization $331,976 Maximum Loan $17,472 5% down $349,499 purchase price $93,186 Bank of M&D (mom & dad) $110,659 25% down $238,790 reduce mortgage & pmts or $442,635 purchase price 30% more than they could afford
Today's Roadmap: - Current Market Stats - The Drivers To - To 2021 & Beyond
To 2021 & Beyond 2.1% Total Population, Capital Region, 1976-2016 2.6% 386,110 330,739 The People: Growth & 236,110 1.5% 1.4% 0.8% 1.1% 1.3% 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036
To 2021 & Beyond The People: Growth & 117,036-27,733 Immigration as a share of population Components of, Canada, 1971 to 2036-49,475 266,890 actual 320,932-45,159 123,890 313,925 0.9% 0.83% Immigration Net Immigration Natural Increase Emigration projected 330,316 0.78% 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
To 2021 & Beyond The People: Growth &
To 2021 & Beyond Components of, Capital Region 3,566 2,746 Net Inter-provincial 3,196 The People: Growth & 880 1,230 533-365 583 1,046 Net Immigration Net Intra-prov. Natural Increase (decrease) 1986 185 858-1,864 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036
To 2021 & Beyond 2.1% Total Population, Capital Region, 1976-2036 2.6% 386,110 330,739 429,824 460,858 The People: Growth & 236,110 1.5% 1.4% 0.8% 1.1% 1.3% 0.5% 75,000 more residents (19%) 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 [55,000 over the past 20 (17%) 35% more!]
To 2021 & Beyond The People: Growth & age 1996 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000
To 2021 & Beyond The People: Growth & age 2016 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 70+ = +23% 50-69 = +81% 20-34 = +12% 4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000
To 2021 & Beyond The People: Growth & age 2016 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000
To 2021 & Beyond The People: Growth & for every senior today there age 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 65 & better +52% 42,000 more seniors 25-64 +11% 24,000 more workers 0-24 +9% 8,600 more kids 2036 4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000 would be 1.5 by 2036
To 2021 & Beyond The Lifecycle of Housing Occupancy: Age Specific Household Maintainer Rates, Capital Region, 2011 45% 51% 52% 55% 57% 58% 60% 60% 61% 61% 68% 63% 56% Housing Growth & 3% 27% 15..19 20..24 25..29 30..34 35..39 40..44 45..49 50..54 55..59 60..64 65..69 70..74 75..79 80..84 85+ age
To 2021 & Beyond Housing Growth & 2% 1% 17% 10% 19% The Lifecycle of Housing Occupancy: Age Specific Household Maintainer Rates, Capital Region, 2011 25% 31% 20% 37% 15% 42% 43% 44% 46% 45% 45% 45% ground oriented 13% 14% 14% 14% 15% 16% 16% apartment 48% 20% 40% 33% 24% 23% 15..19 20..24 25..29 30..34 35..39 40..44 45..49 50..54 55..59 60..64 65..69 70..74 75..79 80..84 85+ age
To 2021 & Beyond 19% Growth in Residents & Residences Capital Region, 2016-2036 23% 21% 25% Housing Growth & Future Occupancy Demand Population 75,000 3,700/yr Dwelling Units 40,000 2,000/yr Colwood, Esquimalt, View Royal & Langford (80,000) Ground Oriented 25,000 Apartment 14,000
To 2021 & Beyond Cohort Future Occupancy Demand Age in 2016 Population by Cohort Number of People Age in 2036 Number of People <15 48,330 <15 57,250 = 15-24 43,276 15-24 42,938 = 25-34 56,541 25-34 51,465 = 35-44 47,830 35-44 62,380 = 45-54 52,011 45-54 68,234 = 55-64 57,027 55-64 55,585 = 65-74 46,158 65-74 53,592 = 75+ 34,937 75-84 47,843 = 85-94 20,069 = 95+ 1,502 = Total 386,110 Total 460,858 = 2016-36 Cohort +19,104 +7,755-9,184
To 2021 & Beyond Cohort Future Occupancy Demand Age in 2016 Housing by Cohort Number of Dwellings Age in 2036 Number of Dwellings 2016-36 Cohort <15 - <15 - = - 15-24 7,168 15-24 6,654 = 6,654 25-34 27,100 25-34 24,776 = 24,776 35-44 25,688 35-44 33,578 = 26,410 45-54 29,981 45-54 39,288 = 12,188 55-64 34,361 55-64 33,490 = 7,802 65-74 28,070 65-74 32,623 = 2,642 75+ 21,897 75-84 31,606 = -2,755 85-94 10,523 = -17,547 95+ 1,611 = -20,286 Total 174,265 Total 214,149 = 39,884 +80,471-40,587 +39,884
To 2021 & Beyond 3,000 Housing Supply & Occupancy Demand, Victoria Metro Region 1996/97 to 2015/16 actual, Projected to 2021 (fiscal year) Starts 2,933 3,105 2,902 Modeled Completions 2,673 2,500 Completions 2,000 1,787 Future housing Demand & supply 1,500 1,000 500 0 1,427 1997 858 1998 1,233 1999 1,236 2000 2,370 2001 1,533 2002 1,602 2003 1,662 2004 1,993 2005 1,618 2006 1,045 2007 1,561 2008 1,983 2009 1,557 2010 552 2011 1,913 2012 1,904 2013 2,404 2014 2,303 2015 2,732 2016 2,694 2017 2,633 2018 2,578 2019 2,538 2020 2,441 Occupancy Demand Increment 2021
1,720 3,240 3,050 1,890 To 2021 & Beyond Projects u/c, proposed & comtemplated Future housing Demand & supply 35 52 Total supply 10,500 units Total demand 12,900 units
To Recap: - Current Market Stats Since the end of 2014 the Capital region has been characterized by record low inventories and above average sales. This has put upward pressure on prices as a growing number of people compete for a smaller number of listings.
To Recap: - Current Market Stats - The Drivers To The drivers to change are wide and varied, from a relatively well growing economy and positive net migration to a limited supply of new product coming to the market to fulfill demand
To Recap: - Current Market Stats - The Drivers To and on the price side we have factors such as growing wages, salaries & household incomes, non-local incomes and other sources of capital that have, and will continue to, push prices higher.
To Recap: - Current Market Stats - The Drivers To - To 2021 & Beyond In the short-term (to 2021), the region is expected to accommodate about 4,700 new residents each year and an associated 2,600 net new dwellings, levels not seen since the 1980 s & 90 s
To Recap: - Current Market Stats - The Drivers To - To 2021 & Beyond Beyond 2021 the region s rate of population growth will slow, largely due to the growing (negative) contribution of natural increase.
UDI Capital Region: Growth & REAL ESTATE thoughtful Andrew Ramlo, VP, Market Intelligence Rennie Group Thank you!!!