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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:

 

Vancouver condo purchase rate of return ROI - rental
Vancouver condo purchase rate of return ROI – rental

 

Condos in Yaletown still remains competitive on rental ROI.

 

 

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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:

1. Quality of Life:

This beautiful and dynamic city is located on the Canadian Pacific coast and belongs to the province of British Columbia. Its 631,486 inhabitants make up 1/5 of the total population of Greater Vancouver. What were once clearly differentiated districts are now confused in their boundaries. For the people of Vancouver, moving to Surrey or West Vancouver makes no substantial difference.  Whether you travel by metro, bus or car, you will always feel safe and have easy access to various services. It doesn’t matter where you are in the city or Greater Vancouver. In Vancouver, you will discover the versatility of modern living combined with the rural and wild essence of its surroundings.

 

2. Multicultural Microcosms

The people of Vancouver are the corollary of Western Canada’s most striking cultural syncretism. You will enjoy an exceptional cultural experience just by traveling from West Vancouver to Richmond. And even in the city center itself. Multiculturalism transformed Vancouver into a multilingual city beyond French or English. Cantonese, Mandarin, Spanish, Hindi or Tagalog may be the dominant languages in some places. So much so that you won’t be surprised to find posters that advertise “English is spoken here” as something exceptional.

Vancouver’s cultural syncretism does not overshadow the classic gleam of buildings that express the finest style of Canadian cultures such as The Orpheum, Queen Elizabeth Theatre, Vancouver Playhouse and the extraordinary hanging bridge of Capilano. These coexist with unique spaces like Chinatown.

 

3. High-Class Immigration

For the middle and upper classes of the Far East, Vancouver has all the qualities of a western city, with none of its faults. This unique appeal has increased the demand for housing for thousands of Chinese immigrants, who find Vancouver an exceptional city. Air connections allow you to travel in as little as 11 hours between Vancouver and Beijing. As a result, while house prices around the world have plummeted since 2008, it did not stop rising in Vancouver until 2017.

4. Attractive for Investors

Cultural versatility has made Vancouver a magnet for foreign investors. These investors discovered in Vancouver all the advantages of a modern western city, with the exceptional adaptability that results from the convergence of multiple cultures in one place.  In addition to the Port of Vancouver, there are powerful industrial and commercial conglomerates, which offer investors comparative advantages over other locations.

Along with the investors comes the fresh money, which increases the value of the properties. This trend remained stable until 2017, when real estate prices began to decline. This is a consequence of the market contraction of up to 14.6% lower than the sales of the previous year. However, in the real estate market, the decrease in prices stimulates investors. It is quite likely that the price crazy in Vancouver will continue.

5. Variety of Offers

There are substantial differences between real estate prices depending on the location, whether it is within the city of Vancouver or the Greater Vancouver. West Vancouver has the most expensive homes that can range from $3,900,000 for a three-bedroom home to over $20,000,000,000. There are also other less expensive locations such as homes located on Fraser Av. which can range in price from $400,000 to 1,200,000. There is a wide range of offers, which sometimes stuns potential buyers.

Vancouver the Best Place to Live:

The 2016 Foreign Buyers Tax regulations imposed a 15% tax rate, and later on has increased to 20% in February 2018.  This legislation affected the real estate market, significantly decreasing sales compared to the last ten years.  However, even after the effects of the Foreign Buyers Tax, investors timidly continue to buy. No further explanation is needed. You already know the reasons: Vancouver the Best Place to Live.

 

 

 

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Metro Vancouver Home Sale Supply Reaches Three-Year High

The supply of homes for sale in Metro Vancouver is rising but residential home sales in the region fell by 37.7 per cent in June. According to a report recently released by the Real Estate Board of Greater Vancouver (REBGV), home sales were 28.7 per cent below the 10-year June sales average thanks to stubbornly high prices even as more houses were added to the market.

“Prices are slow to adjust,” said Tom Davidoff, real estate economist with the University of British Columbia’s Sauder School of Business. “The price momentum has certainly slowed and there is reason to think you will see a further softening of the market going forward. Before prices fall, you tend to see sales activity fall first.”

On the higher-end part of the market, prices are also dropping. In West Vancouver, the benchmark price for detached properties slipped to $3,392,500 in June, down 6.5-per-cent since 2017.

Prices could also continue to fall thanks to an annual 0.2-per-cent property surtax that is being imposed in British Columbia on homes valued above $3-million and up to and including $4-million. For homes valued above $4-million, a 0.4-per-cent annual rate applies. This means the owner of a property assessed at $4-million will pay $2,000 in extra taxes next year, while the owner of a $6-million home will have to pay around $10,000.

Bad News for Taxpayers Could Be Good News for Home Buyers

As the demand for homes declines, a buyers’ market could emerge in Metro Vancouver. After all, price growth has also slowed since June in the sale of townhomes and apartments.

According to the REBGV, the sales-to-active listings ratio for all property types in June 2018 was 20.3 per cent. By property type, the ratio is 11.7 per cent for detached homes, 24.9 per cent for townhomes, and 33.4 per cent for condominiums.

Generally, analysts say home prices can start to fall when the ratio dips below the 12 per cent mark for a sustained period. Conversely, home prices often rise when the ratio surpasses 20 per cent over several months.

Brendon Ogmundson, deputy chief economist with the British Columbia Real Estate Association says lower demand is bringing most markets around the province back into more balanced conditions after years of inflated prices. But, it’s a change that is not happening quickly.

Climbing Inventory May Lower Vancouver Home Prices… Slowly

In June, 11,947 homes of all types were listed for sale on the Multiple Listing Service (MLS), up 40.3 per cent from June last year. Also, the composite benchmark price for all residential properties in Metro Vancouver in June was $1,093,600. This represents a 9.5 per cent increase over June 2017 and is virtually unchanged from May 2018.

Benchmark prices in Greater Vancouver for detached houses were up 0.7 per cent over the past year to $1,598,200. Sales of detached homes in June 2018 reached 766, a 42 per cent decrease from the 1,320 detached sales recorded in June 2017.

Apartment sales reached 1,240 in June 2018, a 34.9 per cent decrease compared to the 1,905 sales in June 2017. The benchmark price for an apartment is $704,200. This represents a 17.2 per cent increase from June 2017 and a 0.4 per cent increase compared to May 2018.

Attached home sales in June 2018 totaled 419, a 37.3 per cent decrease compared to the 668 sales in June 2017. The benchmark price of an attached home is $859,800. This represents a 15.3 per cent increase from June 2017 and is virtually unchanged from May 2018.

“Buyers are less active today,” Phil Moore, REBGV president said. “This is allowing the supply of homes for sale to accumulate to levels we haven’t seen in the last few years. Rising interest rates, high prices and more restrictive mortgage requirements are among the factors dampening home buyer activity.”

A fourth increase in one year from the Bank of Canada on its interest rate is also making buyers a little apprehensive with the rate now at 1.5 per cent. Still, government intervention and an overall decline in home sales mayl be enough to help make the Metro Vancouver housing market more affordable? Only time will tell.

 

 

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Housing Sales In Vancouver Going Sour

Higher prices, rising rates, new tax announcements, and latest mortgage requirements are all playing important factors towards the plummeting of housing sales in the Metro Vancouver area. As housing sales dipped to the lowest level in the recent years, Metro Vancouver’s new homes have soared in the initial quarter of the year, with stats in Vancouver alone being more than twice as high as the same period in 2017. There were 6,542 home sales on the Multiple Listing Service (MLS) in Metro Vancouver during the initial quarter of 2018, which is a decrease of 13.1 percent from the same period last year. This represents the region’s lowest first-quarter sales total since 2013, reported by the Real Estate Board of Greater Vancouver (REBGV).

A Comparative Analysis

The overall housing sales in the first quarter of the year were the lowest in the past 5 years. In fact, even the local listings of detached, attached and apartment properties dropped by almost 7 percent in March as compared to previous year. But total housing stats across the region increased to 6,864 units in the first three months of 2018, up by 30 percent from the last year. Massive increments were also noticed in the Northern Vancouver area, where about 1,422 new homes were initiated, comparable to only 107 in the same period the preceding year. Even though there have been almost 43,000 new homes under construction across the Metro Vancouver area, the current inventory remains incredibly low.

Housing Price Benchmark Reaching Astonishing New Heights

Sales have started to outstrip supply for condos and townhouses. The benchmark price for a condo was close to $700,000 in March. This is a leap of 26% compared to the preceding year. Standard townhouse prices across Metro Vancouver reached $835,300 last month, which is a 2 % hike over February and an overall 18% rise from March 2017.

Renters are paying the real price when it comes to living in these highly expensive areas. According to the Canada Mortgage and Housing Corporation, average rent has nationally gone up previous year by 2.7 percent to $947 per month. Meanwhile, rental property is becoming tougher and tougher to avail. The CMHC says that the overall vacancy rate for cities across the country was three percent in 2017, down from 3.7 percent in 2016. In its annual report on housing rentals, the corporation said the demand for a purpose-built apartment is outpacing the growth in supply, while the rates of condos rented out are also declining.

This uncontrollable price outburst has taken the market by surprise. This is becoming a serious concern for both businesses and residents looking to recruit new candidates. It is becoming immensely cumbersome to buy quality real estate in Vancouver. The government of British Columbia is looking to follow new measures intended to mitigate the highly inflammable housing costs.

Increasing construction can meet the rising demand for rental studios and multi-family homes. Beyond that, it wouldn’t hurt for people to look for suitable accommodations adjacent to or on the outskirts of the Metro Vancouver area!

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Cost of Living Vancouver V.S. International Cities

“Vancouver is expensive to live” has been ring our ears for a while. We have the most expensive gas in North America (gas prices spike to $1.50CAD/Litre) , as well as high cost on housings..etc. On the other hand, we also believe that Vancouver is “very international” as we have

  • hosted at least one Olympic event (2010 Winter Olympics)
  • ranked top 3 most livable cities according to the Economist Intelligence Unit’s (EIU)
  • lots of new immigrants & speaks over 200 languages

The’s  a cost for being a “popular” city so it is expensive to live in! However, how “expensive” is Vancouver compare to other popular ones?   Let’s have a look at cost of living compared with other well-known cities around the world. Looks like we are not too bad!

Cost of Living in Vancouver V.S. other major cities such as Tokyo, New York, Shanghai and more (data April 2018 from Numbo.com)

Please include attribution to Condos in Yaletown with this graphic.

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Yaletown, Vancouver – A Real Estate Prospect Despite Current Situation

2016 – A Year of Ups & Downs for Vancouver Real Estate

At the start of 2016, Metro Vancouver had been a real estate Eldorado, witnessing record-smashing numbers in housing sales and listings. With every passing month since early spring, housing numbers continued the trend of dwarfing the preceding months’ and years’ records. Yaletown was no exception to this, being one of Metro Vancouver’s most desired locations to live in.

A significant contribution to this trend in Metro Vancouver was the investment by foreign buyers, both businessmen and immigrants, in one of Canada’s fastest-growing metros. 2016, particularly, saw a huge surge in the number of foreigners that were migrating to the city. The Metro Vancouver real estate was booming and was at its peak. But so were the prices of listings. Housing rates were at its all-time highest, and it was beginning to concern the city’s officials.

vancouver-supply-demand-real-estate
There’s been an increase in unit listed (supply) and huge drop on the unit sold (demand). This gives a strong signal of buyer’s market. Source: Real Estate Board of Greater Vancouver

In August of this year, the City of Vancouver passed a new tax law on foreigners who wanted to buy into the city’s real estate market. The Foreign Buyers’ Tax was a 15 percent levy that was introduced to thwart off the increasing number of foreign buyers who were significantly responsible for the massive housing rates in Vancouver.

What followed was entirely unprecedented. As expected, the number of sales naturally dropped down drastically in the same month that the levy was implemented. But, in a surprising turn of events, the average housing rates did not budge at all. In fact, many areas including Yaletown, saw housing prices go up despite the fact that there was a lower demand.

The worrying situation failed to improve as September came around. The conditions reflected on a report released by UBS Switzerland on September 27th, declaring Metro Vancouver as the “World’s Highest Bubble Risk.”

Despite these rough waves that have been hitting Vancouver recently, many experts believe that Vancouver’s real estate will continue to remain healthy. A forecast by Central 1 Credit Union predicts B.C.’s hot real estate market will remain healthy for the next two years. Senior economist, Brian Yu believes that slower growth is healthier for the market because sky-rocketing Greater Vancouver prices seen during what he described as “spring fever” were unsustainable, in the early part of 2016.

A Healthier Future for Yaletown

At the hub of Metro Vancouver’s Downtown area, and situated in one of its prime locations, is Yaletown. Its distinct location makes Yaletown one of the most desirable places to live in the city. This automatically results in a higher demand for housing, and ultimately, makes the area one of Vancouver’s most expensive.

Given the recent fluctuating situation and rough sailing real estate boat of Metro Vancouver, Yaletown has been at the thick and thin of it all. With every crest and trough that the city has undergone, it has been directly reflected on Yaletown too.

As the number of listings continues to stack up, the number of housing sales has failed to show any signs of picking up pace anytime soon. Despite this, the rates of listings have not eased. On the contrary, it has gone up over the past couple of months.

Average housing prices currently, at an average, stands at $1,538,349, including detached and attached homes, and apartments. The highest price stands at over a staggering $8 million.

Despite all the inflation within Yaletown’s property prices, Yu’s prediction indicates a promising and healthy future for Yaletown. The popularity of the prime Vancouver region is expected to remain positive.

Dealing with the housing prices in Yaletown can be tricky but promising. Yaletown Condo Listing can help guide you if you want to buy a house in Yaletown, Vancouver.

Home Price Index for Greater Vancouver, Sep 2016 – Detached Home

Area Benchmark Price Index 1 Month +/- 6 Month +/- 1 Year +/- 3 Year +/- 5 Year +/-
Greater Vancouver $1,567,500 289.1 -0.6 16.8 32.7 69.5 66.3
Bowen Island $796,500 172.7 -0.2 21.9 23.8 38.0 31.9
Burnaby East $1,228,500 274.7 -2.6 12.4 29.7 64.5 70.8
Burnaby North $1,564,700 302.6 -2.0 15.1 29.2 66.3 72.3
Burnaby South $1,689,400 323.4 -0.6 21.1 36.5 73.9 75.0
Coquitlam $1,210,600 268.6 -1.5 15.7 34.2 71.7 75.9
Ladner $1,064,800 256.7 3.3 16.2 36.0 70.6 69.9
Lower Mainland $1,252,800 266.1 -0.9 17.1 33.9 65.2 65.2
Maple Ridge $717,400 204.4 0.7 19.1 36.5 55.8 55.1
New Westminster $1,086,000 269.4 -1.6 14.2 31.0 63.8 64.5
North Vancouver $1,663,500 264.8 -1.6 16.9 37.2 74.1 81.7
Pitt Meadows $793,200 223.5 1.2 19.8 34.9 56.7 62.2
Port Coquitlam $888,500 237.0 -2.1 10.4 27.8 61.8 61.7
Port Moody $1,381,900 255.2 -0.9 14.1 30.9 62.3 70.5
Richmond $1,684,800 337.9 -1.1 19.2 39.2 79.5 66.9
Squamish $788,300 209.6 -1.5 19.7 29.1 59.0 58.9
Sunshine Coast $479,800 168.1 0.9 16.7 25.4 40.8 26.4
Tsawwassen $1,269,700 273.4 1.8 14.3 36.6 77.8 78.2
Vancouver East $1,537,300 339.8 0.2 19.3 32.4 80.9 86.8
Vancouver West $3,623,300 372.0 0.2 17.9 32.1 73.2 62.0
West Vancouver $3,361,600 319.6 0.1 20.1 36.4 81.0 89.1
Whistler $1,301,800 180.2 -1.6 15.5 22.5 48.3 38.6