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Vancouver Real Estate: Sales Low – Buyer’s Market

Sales were down in February 2019 over the sales of February 2018 but they were up over late 2018 and January 2019. Although prices are adjusting, particularly in the detached home market, it is important not to confuse lower sales numbers with lower prices. In checking price point changes, we use the benchmark price comparison where model homes with standard popular features are measured against homes of that type that have sold that month. When average sale prices are used they are just looking at prices of homes that have sold divided by the number of sales. In this market where fewer high priced homes are selling a lower average price is attained and suddenly the sky is falling. Not a realistic measuring tool. However, some economists are predicting a larger price drop before rebalancing again. Buyers now have variety of options to choose from , as well as having a chance negotiate to get the

best value home.

Affordability is the elusive goal of governments around the world and there are many ways to crash the economy in trying to achieve it. The Federal Government in its recent election budget is trying a system called SEMs or shared equity mortgages. These have been tried in Australia, the UK and US. According to the Haider-Moranis Bulletin the SEM will be run by CMHC which is a long way from being ready to implement such a program. In Canada there is an assumption that millennials have an RRSP of more than $35,000 that they can borrow from for a mortgage or they can share their mortgage with CMHC as the lender for up to $40,000 to reduce the monthly payments of the mortgage with the loan for the SEM being paid back at the end of the mortgage or the sale of the property.

There is a discussion on just how soon this election goody can be mobilized. There are lots of offerings in the Budget that are not fully funded in a timely fashion, including the Home Buyers Plan.

Anne McMullin, president and CEO of the Urban Development Institute

Anne McMullin, president and CEO of the Urban Development Institute in BC, is on the frontlines with developers and politicians trying to create more affordable communities for those who live here and for the up to 40,000 newcomers who will arrive in Metro Vancouver this year plus another 140,000 foreign students and temporary workers. As it stands now there is not enough rental housing or affordable homes to buy for the people who live here now. Over the next three years the number of housing starts is predicted to go down by 30 per cent. In her Vancouver Sun article Ms McMullin outlines suggestions to make more housing possible:

  • Build more homes of all types by opening up communities to options such as townhomes, row homes, micro-suites, triplexes, mid-rise buildings.
  • More purpose built rentals through financial incentives or targeted tax breaks
  • Link transit funding to building apartments and other home choices near transit hubs.
  • Government should ensure fair taxation on homes. Piling on development charges creates more expensive housing for buyers or renters.
  • Approval process should be faster, particularly in Vancouver where the approval process takes up to 5 years.

 

Vancouver’s Property Evaluation Monthly Market Report 2019 Highlight

For all property types the sales to active listing ratio for February 2019 is 12.8%.

In February 2019 the benchmark price for a detached in North Vancouver was $1,492,400 down 11.5% in one year, up 55.2% in 5 years and up 93.2% in 10 years.

In Richmond the detached benchmark price was $1,546,500 down 12.1% in one year, up 57.0% in 5 years and up 121.1% in 10 years.

In Vancouver East the detached benchmark price was $1,412,900 down 9.5% in one year, up 61.5% in 5 years and up 137.9% in 10 years.

In Vancouver West the detached benchmark price was $3,029,200 down 13.5% in one year, up 41.1% in 5 years and up 128.2% in 10 years.

In West Vancouver the detached benchmark price was $2,616,500 down 16.7% in one year, up 35.7% in 5 years and up 108.8% in 10 years.

Each year affordability declined for local buyers. First time buyers are particularly hard hit by mortgage stress tests, high prices and lack of affordable inventory.

In February 2019 the benchmark price for a condo apartment in North Vancouver was $561,500 down 4.7% in one year, up 56.7% in 5 years and up 80.1% in 10 years.

In Richmond the condo benchmark price was $660,100 down 2.0% in one year, up 78.3% in 5 years and 109.1% in 10 years.

In Vancouver East the condo benchmark price was $545,200 down 3.6% in one year, up 74.8% in 5 years and up 108.7% in 10 years.

In Vancouver West the condo benchmark price was $784,300 down 6.2% in one year, up 61.0% in 5 years and up 98.2% in 10 years

In West Vancouver the condo benchmark price was $1,103,800 down 10.8% in one year, up 57.1% in 5 years and up 83.4% in 10 years.

 

 

 

 

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Slow down on Vancouver Real Estate, Main drag on British Columbia’s Economy

The Federal B-20 mortgage and provincial tax measures introduced in 2018 have brought about a harsh housing reduction in the current and existing home sales market. Retrenchment has mostly been essential within larger urban markets. This will help in the decrease in new home activity in 2019. Home sales in real estate have fallen to a multi-year low pace. Credit constraints together with high-interest rates have triggered a considerable decrease in the purchasing power of buyers, hence price declines and slow activity in the sectors of the economy.

Major real estate markets in B.C.’s has felt the federal mortgage stress test. This is because of the already-high housing cost. In other highly priced markets, where buyers are already self-conscious in their buying ability, the stress test makes them come up more to get into the real estate market. Use of higher down payment is the usual way to make up the difference. In Vancouver, it might be an extra $80,000 when compared with an additional $35,000 in Winnipeg.

Credit : vancouverisawesome.com

As it’s predicted, existing home sales will turn higher by mid of 2019 hence lower prices inducing buyers to enter into the market. The downturn will be unassuming compared to other previous episodes. The Benchmark MLS prices are coming down, and the expectations are that buyers will come back. Since the economy is still sound, then there will be a return in demand. All that is needed to be looked at is about the buyers being able to get financing for their home purchases since sellers don’t have their backs, and so they don’t necessarily have to sell for a lower price.

The current slowdown being experienced in home sales might continue to pull down on the overall economy over the next coming years with the housing starts and residential investment following the decline in sales. The housing starts trail the cycle of sales and are predicted to decrease by 20 percent in this year to 32,600. The current demand down cycle results to higher inventory of new homes and reduced activity of condominium pre-sale hence forcing most developers to have construction delays or even forced to cancel projects. Multi-family housing starts will trigger most of the decline experienced and be highly concentrated in Metro Vancouver. The Government investment in real estate housing will provide some balance hence leading to a reduction in the private investment. Also, the residential investment spending declines with 8 percent this year on fewer housing starts, and a slowdown in renovation is hence spending reducing in 2020 before getting higher.

Real GDP is predicted to slow to 2.1 percent in this year before rising again to 2.4 percent in next year and 2.8 percent in 2021. A build up in significant capital project construction in both private and public sectors will be a strong hence balancing to the decline in the residential activity. Moderate population growth is also a determined source of growth whereby there will be underpinned in consumer spending.

British Columbia’s Housing Matters on Speculation and Vacancy Tax

British Columbia’s major urban centres have issues on handling the housing crisis. Prices of homes and rent have built up hence making it out of reach for many British Columbians. The key measure in solving this housing crisis is the speculation and vacancy tax. People living and working in B.C. deserve a moderate place to call home, and the provincial government is taking measures towards ensuring this. Speculation and vacancy tax is a 30-point plan of the provincial government towards having affordable housing for the people of B.C.

Areas that speculation tax applies. Image source: ctvnews.ca

There are two kinds of taxes that are subjected to Vancouver homes. These include the speculation tax levied on homes located in certain parts of the province and the vacancy tax for homes (empty home) in the city. The annual tax aims towards domestic and foreign speculators who own homes in B.C. but don’t make payments as per where they live, making changes in an empty home to have good housing for the people, and also raising revenue for the support of affordable housing. All homeowners located in B.C. where taxes are chargeable, must completely make a declaration every year. 

Vacancy tax in Vancouver was effected in 2017 and 1% is charged as an addition on homes that are not the fundamental residence of the homeowner. This applies to unoccupied homes for six months or more a year. British Columbia speculation tax, passed in the fall of 2017, also applies to Vancouver’s housing properties.

The rate in 2018 was at 0.5% of the assessed taxable property value. As stated by the legislation in 2019, foreign homeowners (satellite families), charges will be at 2% whereas Canadian nationals (Canadian permanent residents) will still remain at 0.5%, same as last year. This year’s tax will be due on July 2, 2019.

Speculation and Vacancy Tax exemptions

According to legislation, for a homeowner to qualify for a speculation tax exemption, the purchase of the property must be on or before Oct 16, 2018. If forbidden by the development bylaws from a home being rented out, then speculation tax for 2018 and 2019 will be exempt for the homeowner. 

Similarly, the city’s Vacancy tax exemption applies. Empty housing properties for over six months due to rental restrictions will be exempt. This will happen if the bylaws were in place from Nov 16, 2016.

There will be no charge if there is no residence on the property and the buyer has a vacant on which he or she has a plan for a building.  Also, no tax will be charged on properties purchased for the current year.

Another issue that may make homeowners qualify for the exemption is an illness. There are full lists available for both the province and city. In order to claim for an exemption, properties registration by homeowners must be done by March 31, 2019. For registration purpose, it is very simple and can be done either by the use of phone or online.  In case a home is owned by different owners, or even a spouse, you must have separate declarations for each owner.

 

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2019 Vancouver Real Estate Market to Watch. Best Forecast Strategy for Vancouver Housing Price

The beauty of any city is well seen by how people would love to work and live there. Vancouver is one of the cities in Canada where the population is increasing and is ranked at the top as the most populous city in British Columbia province. The main reason behind this great milestone is the home prices that are very high. In March/April 2019, buyers might get their opportunity since the Prices are subsiding and listing growing. The rise of interest rates and mortgage stress test rules are believed to causing the flat sales and price decrease lately. This is a waiting game for almost every Canadian housing markets and hence the lowest prices expected to come in March/April.

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“Huge wave “on Sale and Prices of Vancouver real estate, Down to more Level in History

Vancouver is an area desirable to live. Attractive with a clean and safe environment and mild climate due to the surrounding of mountains, and also full of outdoor recreation, it has raised the demand of housing which continues to grow tremendously within Canada and also overseas. A new study shows that there is a historical demand level as termed by The Real Estate Board of Great Vancouver since there is a drop in sales and prices for Metro Vancouver homes.

A report indicates that over 1,600 residential homes were sold in Vancouver in November. Home prices have dipped 4% to 7% in the past six months depending on the type of property. The conditions will be watched by the board in the first quarter of the year 2019 in order to see whether the buyer demand will pick ahead of the active spring market.

Real estate typically revolves around the world and new supplies are getting into the market. Due to the high level of immigration, population growth in Canada has accelerated in the last few years which is now growing fast. Canada’s future on affordable housing still remains bright. Policy makers in Real estate markets will have approved important key parts aimed at protecting tenants.

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2019 Sponsor parents, grandparents and members of your family to immigrate to Canada

Information is retrieved from Government of Canada.

1. About the process

Permanent residency in Canada can be gained if you submit the interest to sponsor form and later invited to submit a complete application. By doing so, you can sponsor your parents and grandparents to be permanent residents of Canada.

A MUST things to do include:

  • supporting them financially.
  • Ensure they don’t require any social assistance from the government.

2. Eligibility

Requirements to sponsor your parents and grandparents are:

  • Be physically living in Canada.
  • Age-18 years and above.
  • MUST be a Canadian citizen.
  • Living in Canada permanently.
  • Those registered as Indians in Canada MUST be under the Indian Act.
  • Have enough money to cater for the persons you want to sponsor.
  • Provide documents on sources of your income.

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2019 Vancouver Real Estate Outlook

In a word, the outlook for the Greater Vancouver real estate market in the next year is ‘good’ according to industry sources. The British Columbia Real Estate Association (BCREA) points to continued economic growth as contributing to a boost of sales in 2019. The Real Estate Board of Greater Vancouver (REBGV) cites historic trading patterns that will see average prices of detached homes dropping 21-percent in 2019.

MLS Sales Down From 2017

Cameron Muir, Chief Economist for the BCREA, says that Multiple Listing Service sales are projected to record a dip of 23-percent compared to 2017. However, he is confident that the strong economy “combined with favourable demographics” will have a positive impact on home sales in 2019. So much so, that Muir expects the sales figures to exceed the 10-year average in the next 12-months.

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Renting Vancover Condos : What is the Return on Investment (ROI)?

Forget gold, “invest in Vancouver real estate” is the message from the world’s biggest asset manager, Laurence D. Fink. Despite the craziness of Vancouver real estate, what is the actual ROI  these days base on rental income?  We all agree that the housing price is not going to be uplifting as fast as was it was  3 years ago. Many people are not in rush to sale or to buy a property. Instead, people a holding them and renting the units out.

1 & 2 bedroom condo has always been a popular option to purchase and rent due to high demands. Let’s look at the overall ROI in the major cities in Greater Vancouver.

Thanks to the latest information from rentboard.ca and zolo.ca. Below is the calculation:

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The Captivating Side of Vancouver’s Real Estate Market and Current Trends

Vancouver is the highest populated city in Canada. It’s classified as the top-five global cities with a good and affordable quality of life. It was ranked top 10 in the world’s most well-living towns and. This article reports the latest real estate statistics in Vancouver. It also provides an extensive analysis of all the real estate news and trends.

Vancouver’s real estate news economic trend has been forecast to grow to 2.5% in 2018. This shows an upward direction from recent years. From recent surveys in Canada, there’s a high investor demand and redevelopment opportunities expected to take place. However, most investors and regional developers expect an increase in interest rates, and it impacts on the policy changes. This will lead them to be more reserved or conservative in 2018. Due to this, the industrial veterans plan on preparing for a turnaround by:

  • Being more choosy and not in a rush in making their portfolios
  • Efficiency in operations
  • Holding off acquisitions by maintaining the present state of affairs

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5 Reasons Why Vancouver Real Estate Prices Are So Crazy

The city of Vancouver belongs to the Greater Vancouver Regional District. This dynamic city has the qualities of a port city and the charm of the Canadian mountains. It is impossible to talk only about the city of Vancouver, not to mention the surrounding districts such as West Vancouver, Richmond or Surrey to mention but a few.  Living in Vancouver means living in one of the most cosmopolitan and highest-quality cities in the world. All this raised it to the highest standards in real estate development worldwide and therefore housing prices are stratospheric. The reasons that real estate prices are so crazy:

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Vancouver Real Estate: Buy Now or Wait for Stability?

Vancouver, one of the largest Canadian states, is known for having the most unaffordable real estate conditions in Canada, and is currently being rated as the most unaffordable in the entire North American market! Fluctuations in Vancouver’s real estate market put it under continuous evaluation and analysis in attempts to provide the residents with educated suggestions on their investments in residential properties. The July/August 2018 residential properties market in Vancouver has been particularly remarkable with abnormal sales rates and price variations.

Summer 2018 Sales Rate in Vancouver

While the summer season is generally known to be a dormant period for the real estate market, this year’s summer sales in Vancouver are significantly lower than previous year’s rates. In fact, the reported values of 2,070 sold properties in July 2018 is the lowest that the market has seen since July 2000. The estimated overall property sales rate in July 2018 has been reported to be 14.6% less than the previous month (June 2018) and around 30.1% less than that of July 2017.

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