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4 insights on Vancouver Real Estate this June

This year the Canadian real estate trends are navigating with uncertainty. Social change and fast-paced technology transform how people work and leave.

The real estate sector faces rising pressure. Hence, they have to respond with new ideas by accelerating digital transformation. Also, being more innovative with deal strategy and rethinking how to address affordability.  

People who embrace change and creativity.  May find themselves in a position to take advantage of the shifting environment. And also grow with confidence.

Vancouver

Vancouver’s economy is predicted to grow by 2.3 percent in 2019 after seeing a growth of 2.9 percent in 2018. The region’s real estate fundamentals look good, even after years of price increases.

According to interviewees, “Vancouver continues to defy gravity” in terms of commercial prospects.  However, the market is yet to come back to earth. As investors are being more cautious and selective, when looking for new opportunities to invest in.

Let’s have a look at the major predictions and trends for Vancouver real estate 2019.

Vancouver housing Prices: Continues To drop

Get ready to see a lot more houses for sale across Vancouver.  According to Dane Eitel’s research. Buyers will have more room for breathing in the two years or more, even though overall sales rose in May.

Expected average sales price by 2020 is $ 1.4 million for the detached market, signaling a 20 to 40% drop.  Although, there may be other factors that might cause the detached market to go even lower.

Sales have dropped more than $150,000. Resulting, to an environment where the inventory continues to build up. Thus, causing more competition for sellers.

By, the end of 2020, the average cost of a detached house could drop to as low as $ 1.2 million from $ 1.4 million.  Because the overall supply will soon be higher than the demand from buyers.

Vancouver Real Estate is a Nutshell

The major concern of developers who are working in Vancouver. Is the affordability for both the buyers and the seller. This year Vancouver has experienced slow residential markets.

Because of a combination of factors such as rising cost of land and construction, uncertainty around new building starts and the need for additional residential inventory. Resulting to profit margins and guarantees of completion becoming increasingly slim.

 

Industrial inventory is picking upstream in other areas of Vancouver real estate like Blackstone and Amazon.  A slowdown is not expected in this sector anytime soon. Suburban real estate is expected to make a quick return. Because of the strong economy in BC with a growing need for new housing.

Developers concerns around a new development in Vancouver can be mitigated by data analysis, collaboration with municipal companies and by long -term planning.  Well informed projects on the entry level are most likely to succeed.

Vancouver City outlines measure to beef up protection for renters

Vancouver city has introduced a new notification system. That will inform Vancouver house renters of their tenancy rights by mail. This is among a series of measures designed to improve renters’ circumstances. That was outlined in a press release issued by the city on February 27.

Almost 53% of Vancouver’s population, represents renters. The renters have been complaining of their predicament in a city whose tight vacancy rate has averaged 0.9% over the last 3 years. Most of the complaint revolves around renovictions and their inability to find affordable places to live. Even after earning reasonable salaries.

Furthermore, the city staff is planning to update the Tenant Relocation and Protection Policy. The staff are consulting with the interest groups and plan to present to the council with an updated policy in June 2019.

The city is working with the provincial government’s Rental Tenancy Board. To improve renter’s protection. Also, to ensure greater transparency is provided to the city staff tenants and the public About whether planned work on rental properties justifies the eviction of tenants.

Rising Construction and Land Costs Create Slim Margins

The demand for residential land still exists in Vancouver. But the intensity has reduced. Because the issue of supply and affordability has made it difficult for buyers to make purchases. Vancouver real estate has experienced high prices over the last few years. Making it difficult for buyers to move on with purchases.

Rising land prices and construction costs make it difficult for developers to fund projects when selling at lower price points. Presale campaigns have always been a crucial part of new development projects.  However, their success measure now has a huge impact on accomplishing project financing stage.

These issues are further complicated. By the increasingly long time, it takes for a project to be approved.  This drives the costs of pre-development up.

Additionally, it creates uncertainty in the deliverability of projects. Hence, investors and buyers are left wondering whether their will really see the completion of their projects.

Slim margins, lack of trust and the rising cost of land and construction materials. Have created a situation where developers need to shelve projects for lack of financing.

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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

Read more

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Bursting Vancouver Real Estate’s Bubble: Are We There Yet?

The latest statistics from the Greater Vancouver Real Estate Board reveal that the benchmark cost of a single detached home in Vancouver is up nearly 40% from just over a year ago. This rapid ascent has drawn the attention of retired master hedge-fund manager, Marc Cohodes. In a recent interview, Cohodes tells Global BC News Morning that he believes members of the real estate industry are using “chinese money to keep the market propped up” as part of a money-laundering scheme that Cohodes says can’t last.

Real Estate Bubble
Source: Huff Post Business Canada

Foreign Investment: Myth or Reality?

According to the Global News article about Cohodes, not everyone agrees that the influx of foreign money is due to criminal activity. However, many do agree that foreign money is a signification contributor to the high-flying real estate prices here in Vancouver. To put this belief to the test, the government of British Columbia launched a study in June to begin tracking real estate investments in the province by foreign nationals.

Initial results from the study show the dollar value of foreign investment in residential real estate between June 10 and June 29, 2016, averaged slightly over 5% province-wide. Foreign transactions represented slightly over 3% of all MLS property transfer transactions during that same time period. This indicates that the average amount per transaction is higher for foreign buyers than Canadian citizens and permanent residents. In Metro Vancouver, the total value of investments from foreign nationals was over $350 million, or 6.5% of the total investments made during the first 19 days of the study. The highest concentrations of foreign investment were found in Richmond with a 14% rate.

Across the province, 258 transactions involved Chinese nationals, which was 76.6% of all foreign national transactions. More data and details are available in the Housing Market Information Release on BC MLS Home Sales issued by the Ministry of Finance. The Ministry report indicates that new housing units are in development throughout the province. However, these developments take time. Meanwhile, the housing market remains tight. In addition, more voices lately have been calling for a tax on foreign real estate transactions. Will these factors finally burst the real estate bubble as Cohodes predicts? And if so, when?

Vancouver Condo and Detached Home Buyers Pushed to New Heights

While we wait to see what the future holds, those who want to own a home in Vancouver today are faced with steep prices and limited selection. From single-family homes to luxurious condos in Yaletown, local buyers are feeling the effects of the pricing bubble.

The Real Estate Board of Greater Vancouver reports that June residential property sales totaled 4,400 transactions. This is slightly down from May; although, higher than same-month sales last year. Looking at historical records demonstrates that houses are still moving despite the higher prices. June 2016 ranked as the highest-selling June on record, at 28.1% above the 10-year sales average. Total listings for the four-month period from March through June have also reached an all-time high.

line-up-of-close-to-60-people-langley-condo-sales-centre
Picture of people waiting in line for days to buy a new condo in Langley back in May, 2016. Source:cbc.ca

Despite an increase in listings, supply has not exceeded demand and prices for both detached and attached residential properties continue to climb. The REBGV announced that benchmark prices for attached units in June 2016 increased by 28.1% from June 2015 prices. However, this rate remains lower than the 38.7% increase in detached properties.

 

Regardless of who is investing in Vancouver’s real estate, those who work in the city still need a place to live. So what is a prospective home buyer to do? As the saying goes, “location, location, location.” Look for properties that are located in sought-after areas that will hold their value, such as a Vancouver downtown condo. In particular, the thriving community and close commute make Yaletown condos a good bet during tumultuous times. If you are in the market for a new home here in Vancouver, contact Condos in Yaletown. We can show you the best real estate the city has to offer and help you choose how to invest your real estate dollars effectively.  

 

 

Real Estate in the Greater Vancouver Overview – June 2016

june-2016-vancouver-real-estate
Source: GVRB