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The Ups And Downs of Vancouver Real Estate Market

Past Scenario

Housing in Vancouver was one of the biggest stories of 2016. A year ago, the Vancouver real estate market was described as a hot and sizzling market. The housing prices in Vancouver took a great leap and mushroomed over the year. These high rates were considered to be a boon for some and bane for others since after the evaluation, the cost of properties increased by double digits; in a few cases, the costs were raised by 40%.

In March 2016, the yearly homelessness count in Vancouver showed the highest number of people sleeping outside in ten years. Further, in June, the value of single detached houses and condos shot up by 40 and 25 percent respectively. The Finance Minister, Mike de Jong made an announcement of imposing 15 percent tax on foreign nationals. Along with this tax, the Vancouver city was also introduced to empty homes tax and new policies concerning the rental markets. The drastic increase in real estate prices affected the rental market as well.

The Present Situation

In the words of Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president, “It (2016) was an eventful year for real estate in Metro Vancouver. Escalating prices caused by low supply and strong home buyer demand brought more attention to the market than ever before.” Moreover, the Metro Vancouver real estate market experienced its third highest selling year on record in 2016, behind only 2015 and 2005.

Though, the recent updates have shown that the total number of houses vended in Greater Vancouver dropped more than 22 % in December in contrast with the preceding month. President Dan Morrison said that sales might have slowly risen, but the property costs have not dropped significantly.

According to the calculation, made by the real estate board, the benchmark price for apartments has escalated by 27 % from July 2015 to July 2016.  On the other hand, the price for townhomes has hiked by 29 percent, which is equal to the upper range from B.C. Assessment. Morrison said that it would take a little while for the market to familiarise with the changes that are taking place, and that the limited supply is the reason for a rise in the prices.

Future Forecast

According to Royal LePage, CEO Phil Soper and the latest predictions by real estate groups and financial institutions, the long-awaited corrections required in Vancouver’s inflamed housing market may be just around the corner. It has been forecasted that prices are headed for a double-digit decline in 2017 as the purchasers are dropping out of the housing market.

A report released last month by the B.C. Real Estate Association anticipated an 8.7% fall in housing costs in the area for 2017 with the average MLS value dipping from $1.03 million in 2016 to $940,000 next year. Similarly, in the month of October, the National Bank foretold a 20% drop in the rate of detached houses in Vancouver, a 9% drop for attached houses, and a 5 % decline in the prices of condos.

To these predictions, the economist at University of B.C., Tom Davidoff stated that ‘There’s no question the market is getting buffeted by headwinds.’ He also said that these mid-range conjectures are targeting on a modest correction after months of sinking sales in the Greater Vancouver market.

Besides, for Davidoff, Canada will always remain a prized destination and haven in a tumultuous world. “Having a stable democracy with a beautiful environment, over time, is going to be a real strength of Vancouver,” he said.

 

December Vancouver Real Estate pricing
December Vancouver Real Estate pricing. Source: REBGV

 

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Most Expensive Cities to Live In 2016

All are aware of the fact that the sun rises in the east and night falls in the west. Now, whichever part of the world you live in, this fact doesn’t change, but the aura, taste and stories of every city differ all over the world. Hence, every city has its own philosophy and certainly different ways of philosophizing.

Now, to look at the pragmatic side of the picture, the cost of living in a particular city has divided the cities into various segments. The most expensive cities to live in 2016 will be explored here.

According to the latest annual Cost of Living survey, conducted by the investment consultancy firm Mercer, the below-listed cities are the world’s most expensive cities.

1. Singapore

Marina Barrage in Singapore
Marina Barrage in Singapore. Credit to Jason Goh

With beautiful locations and the largest business centre in the world, Singapore, the only island city-state has become one of the most expensive cities in the world to live. With high-rise price tags,

With beautiful locations and the largest business centre in the world, Singapore, the only island city-state has become one of the most expensive cities in the world to live. With high-rise price tags, the cost per square metre of buying an apartment in Singapore is about 23,426.05 S$.

2. Zürich , Switzerland

Zürich , Switzerland
Zürich , Switzerland. source: Tourist Destinations

Zurich is a global city that has the world’s largest banks and financial institutes. According to the survey, Zurich has the best standard of living life. The current price to afford an apartment in City Centre, Zurich is 13,071.43 Fr. per square metre.

 

3. Hong Kong, China

Hong Kong Skyline
Hong Kong Skyline. Credit to Unsplash

Hong Kong is officially known as a special administrative region of the People’s Republic of China. The city boasts of modern architecture. Hong Kong has sky-high prices to match the sky-high setting. In Hong Kong, the present price of an apartment per square metre is 185,282.05 HK$.

4. Geneva, Switzerland

Geneva,Switzerland
Geneva, Switzerland. Credit to http://www.iises.net/current-conferences/academic/32nd-international-academic-conference-genevaIISES

For living in Geneva, you have to spend some extravagant prices for entertainment and pleasure, yet a falling currency has compensated its cost of living for emigrants. To buy an apartment in Geneva, the price you will have to pay is 12,500.00 Fr. per square metre.

5. New York, U.S.A.

New York, USA
New York, USA. Credit to A.H.


Economic Intelligence Unit stated in its report that
“a stronger dollar and localised inflation mean that New York continues to become more expensive relative to its global peers”. 13, 131.47 $ per square metre is the price that you will have to pay to purchase a property in City Centre, New York.

There are other cities including Los Angeles, Tokyo, Shanghai, Seoul, Copenhagen, and Vancouver with the exorbitant rise in prices that have also made it to the list of world’s most expensive cities.

Have you already started dreaming of living in one of these cities? Hope your bank balance is deep enough to fulfill your grand dreams.

Factors That Led These Cities to be on Top of the List

The survey was based on a comparison between product prices to conclude the world’s most expensive cities. The assessed products included food, drinks, transport, clothing, housing, housing goods and recreation. Further, New York City costs were used as a relative baseline and US dollar as the relative currency.

Before the survey was released, it was preconceived that the western countries will hold the maximum places on the list, but the south-east Asian and African countries have surprisingly hit the top positions on the list.

On the other hand, the US dollar has fairly risen in comparison to the Canadian dollar. The rank of cities in Canada has persistently dropped because of the feeble Canadian dollar. Canada’s highest-ranked city, Vancouver clearly hacked down 23 positions lower. Since the cost of living in Vancouver has dropped, people’s hopes for living in this city have awakened once again. After all, the city has always been ranked amongst the top livable cities in the world.

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2+ bedroom for Less than 250K in Greater Vancouver - Really?

In the past 10-Years, we have seen an unbelievable increase in the housing price and that makes this beautiful lower mainland unaffordable.  Vancouver is World’s 3rd Most-Unaffordable city  .

2-Bedroom is Standard

Minimum 2-bedroom suite becomes standard for people that lives in lower mainland. On an average, most people pay from $1200/month to $3500, based on the location and the condition of the suite.  We have discussed about  buying a home than renting one i  in the previous topic, and we would like to further emphasize that Vancouver is not unaffordable anymore.

Today, I am going to list out the homes that are 2-bedroom AND less than 250k, and yet convenient for majority of people. (NOT areas such as Maple Ridge, Pitt Meadow, Surrey, Langley).

 

There aren’t many, but here are the list  (Dec 19, 2016)

106 8040 Blundell Road, Richmond, British Columbia V6Y 1J8

$199,999.00

  • 15 minutes walk to the Skytrain station.
  •  Shops, gas stations etc are all nearby

property-17657696-largephoto-3 property-17657696-largephoto-10

 

306 8040 Ryan Road, Richmond, British Columbia V7A 2E5

$193,000.00

  • 3 bedrooms!
  • 1133 sqft!

property-17647319-largephoto-2 property-17647319-largephoto-8

 

103 9128 Capella Drive, Burnaby, British Columbia V3J 7K3

$239,900.00

  • 15 minutes walk to Burquitlam skytrain station

property-17598862-largephoto-1 property-17598862-largephoto-5

 

 

Looking for MUCH BIGGER space within 250k?

It’s definitely possible but you may need to look into mobile home.

Here’s a mobile home that’s currently in the market, that is over 1500 sqft. Please keep in mind there’s a pad rent of couple hundred dollars per month (usually includes water, sewer, garbage and taxes). Also, you do not own the land of the property.

36 201 Cayer Street, Coquitlam, British Columbia V3K 5A9

property-17647366-largephoto-1property-17647366-largephoto-3

 

 

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Planning to buy your Dream House in Yaletown? Trust the experts!

The Present Scenario

Vancouver’s real estate market is heating up, with its recent highest annual price increase recorded at 23.4 per cent. The high real estate prices secure the finances of present-day homeowners but are frustrating for the potential first-time buyers.

According to the recent updates, the Canadian real estate crisis has jerked up parallel to the warning signs of danger. The ability to afford a house in the Canadian city of Vancouver has become a difficult process. The chief economist of Canada Mortgage and Housing Corporation (CMHC) also stated in a news release that today the cost of buying a property is higher than the level of personal disposable income and population growth.

For the first time ever CMHC, the federal agency will be issuing a “red alert” warning for the entire real estate market. The agency believes that the housing market is in need of significant price correction because the cost of homes and debts are on a continuous path of growth.

 

New Mortgage Rules – A bane for first-time buyers

The recent additions to the mortgage rules are real hindrances, particularly for the first-time home buyer. According to the new mortgage rules, a potential buyer with insured mortgages will have to go for a stress test. The stress test is to ensure the financial stability of the borrower in case the rate of interest rises. But the key positive factor in this situation is to secure house owners from taking on excessive debts. It is good news for the fence sitters, who have been waiting for real estate market to soften; now they can buy the house they always wanted too.

Though the people of Vancouver are overwhelmed by the high housing prices, the new move by British Columbia of charging an additional 15 per cent tax on foreign house buyers is highly supported by the residents, especially those in Yaletown.

cmhc-new-10-down-payment-chart2

Yaletown – Still a Ray of Hope for younger Vancouverites

Yaletown is a stylish, historical region of Vancouver, BC. It has a sophisticated and cosmopolitan ambiance that makes it an attractive place to buy a new house. But the housing in Vancouver, BC is out of control. The hike in real estate costs is majorly affecting the young people of the city. For the young natives of Yaletown, housing has become a luxury item and the government is taking a lot of time in arbitrating this crisis.

The contemporary scene of the housing market is frustrating for an average Vancouverite. The young natives in the city have to save more than past times for even a 20 per cent down payment. They are trying to squeeze themselves into the place where they were born and had invested in for so long.

According to Paul Kershaw, founder of Generation Squeeze, the Vancouver’s housing crisis has hit “code red.” The city might lose its people belonging to the younger generation who are the real assets.

Despite the dire situation, many experts believe that the real estate market in Yaletown and the rest of Vancouver will retain its healthy status in the near future. Expert economists in BC have cohesively predicted the same. This poses as a promising situation for youngsters who don’t have to save a lot to invest in a house.

 

Lifestyle Audits by CRA

The skyrocketing real estate market of Vancouver has highlighted individuals who have a luxurious lifestyle and an expensive house, but their earnings are of average category. The Canada Revenue Agency plans to investigate into the matter and their key area of inquiry would be “lifestyle audits.”

Lifestyle audits will include the examination of highly-priced homes, expensive cars, and assets, which will be compared to the income reported on tax returns. The audit will confront the culprits and with a committed execution, the resulting state of Vancouver’s real estate will bring back the brighter days of the city’s housing market.

In the current risky conditions, buying a house or any other property should be dealt with great care. At Yaletown Condo Listing, we customize a plan to meet and exceed our client’s needs. Get in touch with our realtors Tanya Jakubec when planning to buy a new house in Yaletown.

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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
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Vancouver Real Estate Market Continues to be Active

 

There is something about Vancouver that attracts people like a magnet. It has a lot to do with the location on the west coast of British Columbia and the size. Vancouver is currently the eighth largest municipality in Canada and as such has several amenities, attractions, cultural diversities and as many assets as liabilities.

One of the many ways one can gauge progress in and around the city is by taking a closer look at the Vancouver real estate market. According to the Real Estate Board of Greater Vancouver there has been a shifting of sorts within the current market. While numbers pointed towards a record-setting pace in early 2016, in recent months dips have pushed figures back down to what local experts have termed “historically normal” levels.

 

Looking at the Numbers

According to the REBGV a total of 2,489 residential property sales were recorded in Metro Vancouver for August 2016. Compared to 3,362 sales in the same period in 2015 the numbers show a decrease of 26-percent. Going further back to August 2014 and there is a 10.2-percent decline (2,771 sales) and just a one percent difference from the 2,514 sales recorded in August 2013.

Compared to July 2016, August 2016 recorded a drop in property sales totaling 22.8-percent – that’s almost a quarter of total sales. While these decreases in overall sales can be a telltale sign about the state of the Vancouver real estate market, what it says to the REBGV is something else. The dip in the number of homes sold in the market also pushes down asking prices.

VW-APT
Currently there’s bit more supply over the demand. However, the price remains high.

Prices Are Not The Issue

Typically when property sales figures shift downwards it is an indication that prices are too high for buyers. The REBGV says the current trend is not entirely related to that at all. In fact, in August the sales-to-active listings ratio was 29.3-percent which is considered a seller’s market. What may have a greater impact on the numbers currently is the recently implemented Foreign Buyers Tax which appears to have reduced foreign buyer activity.

The 15-percent tax went into effect August 1, 2016 and it is still far too early to see what impact it has had on the Vancouver real estate market. It is easy to lay some of the blame of dropping sales figures in the first month the tax has been in place on this development however, traditionally property sales dip in the middle of summer.

 

Yaletown Condos are a Different Matter

The upside to the shifting in the real estate market in Metro Vancouver is that apartment properties have not seen as much of a dip as detached homes have over the years. For example, according to the REBGV apartment sales in August 2016 totaled 1,343, down just 10.1-percent from August 2015. Plus, the benchmark price of apartment properties has seen an increasing trend.

The benchmark price recorded in August 2016 of an apartment property was $514, 300 – an increase of 26.9-percent from August 2015 and an increase of 6.1-percent since May 2016. In comparison, the benchmark price of a detached home increased in the past year by 31.1-percent with sales dropping 25.4-percent over the same period.

What Does All of This Mean?

Although there is no shortage of movement within the real estate market in Greater Vancouver, what seems to be the most stable of the properties are apartment units such as Yaletown condos. While prices of both homes and apartments have increased, and sales have decreased, the margins are narrower with apartments and Yaletown condos than with detached homes. This makes investing in a condo a wise choice in today’s Vancouver real estate market.

 

 

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Yaletown- What’s New?

Once upon a time, Yaletown used to be the westernmost stop for the Canadian Pacific Railway, and so, it was a place where industry boomed. Now, it’s a vibrant area with new industries, cafes, restaurants and bars to die for, beautiful parks, animation studios and high-rise condominiums.

Yaletown’s Recent Openings & Activities

Tacofino opens its gates in the area

The latest addition to the list of Yaletown’s restro-bar is Tacofino. The area welcomes the 50-seat counter-service restaurant and bar, which also features a 12-seat patio and take-out bar.

When a taco craving hits, Tacofino is a must-visit.

People love the tempura fish taco with salsa fresca and chipotle mayo & a few new items such as pepper shrimp with spicy peanut sauce, smoked tuna burrito, white bean taco, lemongrass chicken taco, tater tot carnitas, crispy squid and beef brisket barbacoa.

Tacofino opens at 11am-10pm, Monday-Wednesday, and 11am until late, Thursday-Saturday.

Tacofino Yaletown's new signage (Jess Fleming/Daily Hive)
Inside Tacofino Yaletown (Jess Fleming/Daily Hive)
Inside Tacofino Yaletown (Jess Fleming/Daily Hive)
Inside Tacofino Yaletown (Jess Fleming/Daily Hive)
Jess Fleming/Daily Hive
Inside Tacofino Yaletown (Jess Fleming/Daily Hive)

PET-A-PALOOZA coming to Yaletown this year

PET-A-PALOOZA returns to Vancouver, and guess what? It will be held in Yaletown on August 28th this year. PET-A-PALOOZA is West Coast’s largest outdoor pet festival.

In the most awaited canine festival of the year, events such as “Running of the bulls”, a hilarious 20 ft. French and English bulldog races, cool down stations, photo lounges and over 50 of the leading pet related exhibitors are going to take place.

PET-A-PALOOZA is a pet-friendly festival to have amazing fun with your pet. And best of all, it’s FREE! Dog owners bring their pet to sample treats, food, accessories, and toys and get hooked up with loads of free swag!

petapaloozawest
Image Source: Pet-A-Palooza

Animation Studio Arrived in Yaletown

Award-winning Australian visual effects and animation studio Animal Logic has arrived in Yaletown, Vancouver in September 2015. The credit for the boom of Vancouver animation industry goes to this new 45,000 sq. ft. studio in Yaletown.

Real Estate Yaletown

In the 19th Century, Yaletown used to be a rail yard. As railway loading docks converted into restaurant and cafe patios and warehouses into lofts, Yaletown became a very desirable place to live for Canadians as well as for people from outside the country. Yaletown’s upscale restaurants, offices, boutique stores, nightclubs, animation studios and access to the False Creek marina make this place a playground for Vancouver’s elite.

New properties have come up around this central area, and Yaletown now owns apartment buildings housing modern condos with great views and fantastic amenities.

If you are looking for some of the best properties in Vancouver real estate, then your search will end now. Yaletown condos will offer you elegant and modern living, however, the prices may be higher than most other Vancouver real estate of similar proportions.  

It’s a little expensive to buy a residential property in Yaletown. The current average Yaletown house price is $847,240.

Living in Yaletown

If you wish to buy a condo in Yaletown, you must have a Realtor at your side. Find your perfect home in Yaletown.

 

 

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A Brilliant Step towards Affordable Housing in the Canadian City of Vancouver

B.C. Tax Targets Foreign Home Buyers

Since the past one year, soaring housing prices in Metro Vancouver have been one of the major concerns in the country. Vancouver is an extremely attractive property destination for foreign investors to secure their money.

Addressing the role of foreign investors in the red-hot housing markets of Vancouver, Canadian province British Columbia has announced an additional 15 percent tax on foreign home buyers in the greater Vancouver. It takes effect on August 2, 2016. The ultimate goal of the British Columbian government is to increase housing affordability for the local residents.

bc-property-1
Premier Christy Clark and Finance Minister Michael de Jong, discuss amendments regarding housing issues in Greater Vancouver from the South lawn during a press conference at the Legislature in Victoria, B.C., Monday, July 25, 2016. Source: Financial Post

The Surprise Move

The benchmark price for a detached home in Vancouver has increased by more than 30 percent in the past year.

The surprise move comes after the government tracked all residential real estate transactions across British Columbia between June 10 and July 14, and found that foreign nationals invested more than $1 billion into B.C. property, of which more than 86 per cent was invested in Vancouver and the surrounding areas.

The Affected Properties & Areas

The newly announced tax applies to the sale of all residential properties such as single and multi-family dwellings, apartments, and condominiums within 22 communities in Metro Vancouver, and to buyers who are not Canadian citizens or permanent residents, as well as corporations that are either not registered in Canada or are controlled by foreigners.

The affected areas include the Greater Vancouver Regional District and other prescribed areas, but exclude treaty lands of the Tsawwassen First Nation.

mike-de-jong
B.C. Finance Minister Mike de Jong has released another report on foreign nationals buying homes in B.C. between between June 10 and July 14. Source: CBC News

Hiked Tax to Scare Most Foreign Speculators Off

Whether the tax hike will have the envisioned effect of restraining the flow of foreign investment in the residential real estate market and improving affordability for local residents or not, remains to be seen. But, surely, the rise in tax will have a significant effect on foreign buyers and sellers who have entered into agreements for purchase and sale before August 2, 2016.

Experts believe that the new property tax could cool demand. After all, very few foreign home buyers will be willing to pay $750,000 in tax for a $5-million house. But foreign speculators could get friends or family (who are permanent residents) to buy on their behalf in order to escape paying the tax.

Better Days Ahead for Vancouverites

Feverish foreign investment and a market struggling to build enough new homes have led to a spectacular house price boom in Vancouver. But a massive tax hike on foreign purchases will help manage foreign demand while new homes are built to fulfill the needs of local residents.

Hopes High for Housing Affordability

According to the Prime Minister, Justin Trudeau, rising home prices, uncertainty around being able to buy your first home or to be able to upgrade as you want to grow a family, is a real drag on the country’s economy and Canadians’ opportunities.

But as Canada plans to tax overseas investors buying homes in Vancouver, the local residents can have their hopes high of owning a home in the city. Search for the best residential properties on Condoinvancouver.

 

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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.

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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

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Source: GVRB

 

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Vancouver is One Hot Housing Market—Can a Yaletown Condo Beat the Heat?

 

Despite recent economic downturns in other parts of the country, the cost of owning a detached, single-family home in Vancouver continues to rise. More and more prospective homeowners are looking at Vancouver condos as an alternative route to homeownership in this flourishing city. As home prices Vancouver continues to rise, luxurious condos in Yaletown and Vancouver downtown condos are an increasingly attractive alternative for many of Vancouver’s up and coming residents.

How Hot is It?

According to recent statistics, it now costs nearly 120% of a household’s median annual income to purchase a stand-alone house in Vancouver. Royal Bank of Canada, in its 2016 first quarter RBC Housing Affordability Fact Sheet, refers to Vancouver’s 25% year-over-year housing price surge as “epic.” Housing prices for single-family homes in Vancouver have reached such extreme heights that in June Prime Minister Justin Trudeau hosted experts at a Roundtable on Affordable Housing to discuss the situation.

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Detached Homes are Boiling Over

In its 2016 first quarter Housing Trends and Affordability Report, RBC announced an 87.6% aggregate affordability rating for detached, single-family homes in Vancouver. This means that the total cost of owning a home in Vancouver—including mortgage payments, taxes, and utilities—would consume over 87% of a typical family’s monthly pre-tax income.

Kerry Gold, writing about the housing roundtable and citing data from Landcor, reports that the average price for a detached house sold in Vancouver is now nearly $3 million. Other reports place the average sale price at a mere $1.4 million. While these figures would seem to indicate that incomes in Vancouver are robust, home ownership is still not for the faint of heart or light of wallet.

 

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From Real Estate Board of Greater Vancouver

 

Prices for Vancouver Condos Stay on Simmer

The burgeoning prices of detached single-family homes in Vancouver have put them out of reach for many hopeful homeowners and made them unattractive to investors and lenders. Fortunately, Vancouver condo and apartment prices, while still moving up, have not increased at the same alarming rates. Craig Wright, RBC’s Chief Economist, stated in a recent news release that the2016 first quarter housing affordability rating for Vancouver’s condo apartment market is 46%—a figure that aligns with housing costs in much of the rest of Canada. The same article that reports average detached home prices in the $3 million range indicates that the average condo in Vancouver may be purchased for just under $750,000.

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From Real Estate Board of Greater Vancouver

Find a Condo That’s Just Right in Yaletown

Even as the Vancouver housing market tightens, purchasing a condominium in Vancouver remains an option for those who are ready to stop renting. Instead of having to move far away from the city center, those seeking to own a home can enjoy all the benefits of living in a close-knit community by purchasing a Yaletown condo. Yaletown high-end condos are a perfect way to buy a home sans the extra maintenance and commute time associated with owning a single-family home. Yaletown and downtown Vancouver condos are available with a number of attractive features that make them just right for buyers of all types. Before the market gets any hotter, isn’t it time to find the one that suits you?